OSI Systems Sets New Records in Q4 2025: Security Division Drives Growth and Wall Street Analysts Forecast Upside

OSI Systems reported record Q4 2025 revenues driven by its Security and Optoelectronics divisions, with Security up 7.1% YoY and Optoelectronics reaching $113mln. Wall Street analysts expect an average price target of $243.33, indicating a potential 11.68% upside. However, the GF Value suggests a potential overvaluation, with a projected one-year fair value of $173.10 and a 20.56% downside.

Title: OSI Systems Reports Record Q4 2025 Revenue; Wall Street Analysts Weigh In

OSI Systems (OSIS) has reported record Q4 2025 revenues driven by strong performances in its Security and Optoelectronics divisions. The company's quarterly revenue reached $505 million, a 5% year-over-year increase, with a non-GAAP adjusted earnings per share (EPS) of $3.24. The Security division, which saw a 7.1% year-over-year revenue growth, contributed significantly to this performance, while the Optoelectronics division reached a record $113 million, up 10% year-over-year [1].

The Security division's growth was fueled by robust demand from airport and international border security customers, major program advances, and new contracts. The Optoelectronics division, on the other hand, benefited from stabilized OEM customer inventories and new orders from healthcare innovators. For the full year 2025, the Security division's revenues grew by 14.7% year-over-year, further underscoring its strong performance [2].

Looking ahead, OSI Systems has provided fiscal 2026 revenue guidance of $1.805 billion to $1.85 billion, representing a 5.4% to 8% year-over-year growth. The company plans to sustain this expansion through strategic investments and M&A activities. However, the company faces key contradictions, including service margin pressures and cash flow management challenges, particularly from delayed Mexico payments [1].

Wall Street analysts have responded to OSI Systems' latest earnings with mixed signals. The average price target of $243.33 suggests a potential 11.68% upside, indicating bullish sentiment. However, the GF Value projects a one-year fair value of $173.10, suggesting a 20.56% downside, which could indicate potential overvaluation [2].

Investors should closely monitor OSI Systems' ability to manage its cash flow and service margins, as well as its progress in collecting delayed Mexico payments. The company's strong backlog and service revenue growth provide a solid foundation for future growth, but the risks associated with tariffs, backlog conversion, and the timing of government funding remain significant factors to consider.

References:
[1] https://www.ainvest.com/news/osi-systems-q4-2025-key-contradictions-service-revenue-mexico-impact-growth-outlook-2508/
[2] https://seekingalpha.com/news/4488107-osi-systems-outlines-5-percent-8-percent-revenue-growth-target-for-fiscal-2026-amid-record