OSI Systems, Inc. (OSIS) Stock Price & How to Invest

OSI Systems, Inc. runs three divisions from its base in Hawthorne, California, with roughly 7,300 employees. Security is the largest and best known: Rapiscan and AS&E branded X-ray, computed tomography and gamma-ray systems that screen carry-on bags, checked luggage, cargo containers, vehicles and people at airports, ports, borders and government sites, increasingly sold as multi-year turnkey screening services rather than one-off boxes. Healthcare is Spacelabs, which sells patient monitoring, cardiology and anesthesia products into hospitals. Optoelectronics and Manufacturing builds photodiodes, detectors, optical sensors and electronic subassemblies, some for outside customers and some feeding the company's own security and medical products. Trailing revenue runs about $1.81 billion, with Security contributing roughly two-thirds of the total.

The investment picture turns on order flow versus profitability. Fiscal 2026 third-quarter revenue of about $453 million and non-GAAP EPS of about $2.60 were both records for the period, backlog hit a record of roughly $1.9 billion, and book-to-bill came in near 1.3 times, helped by a not-to-exceed award of about $235 million for a homeland-defense over-the-horizon radar transmit subsystem. Shares still fell sharply on that print, because adjusted operating margin compressed to roughly 11.7% from about 14.2% a year earlier and Mexico security revenue dropped to roughly $11 million from about $69 million as the large SEDENA program wound down. Layered on top is a credibility question: a March 2025 short report from Culper Research alleged aggressive revenue recognition on the Mexico work and understated disclosure of Department of Justice interest, and several plaintiffs' firms opened investigations, though as of August 2026 those remain investigations rather than a filed complaint with a case number.

Revenue is concentrated in a small number of very large government contracts, so a single program ending, as the Mexico SEDENA work did, can erase tens of millions of quarterly revenue with little notice. Margin direction is the live issue: adjusted operating margin fell about 250 basis points year over year in the fiscal 2026 third quarter even as revenue and EPS beat, and the shares dropped roughly 15% on that report. The company has faced repeated allegations around foreign contracts, including a March 2025 Culper Research short report on Mexico revenue recognition and Department of Justice subpoenas, plus an earlier securities case tied to an Albanian concession that was settled; further legal or regulatory action would be a real overhang. Share count is small, near 16 million, which makes the per-share price high and daily moves larger than the market cap alone suggests. Competitors including Smiths Detection, Leidos and state-backed Nuctech compete hard on price in international tenders, and government budget timing can push awards across quarters for reasons that have nothing to do with the product.

7 analysts publish price targets on OSIS, averaging $298.14 against a $232.61 price as of August 2026, or +28.2%. The published targets run from $270.00 to $320.00, a narrow spread, and the ratings split 6 buy, 1 hold, 0 sell. Over the last six months there have been 0 raises and 2 cuts among the published actions. A price target is what an analyst published on a date, not a prediction, and sell-side ratings skew positive across the whole market.

Read the full OSIS forecast and price target for the target table, the recent rating actions by firm, and how the consensus has shifted.

We give no verdict on OSI Systems, Inc.. Both cases are real, which is why the question is contested at all, so here is the strongest version of each.

The case for buying. Aviation and border screening replacement demand. Checkpoint computed tomography, checked-baggage systems and cargo and vehicle inspection are on multi-year refresh cycles funded by aviation authorities, customs agencies and defense ministries. The most optimistic published target, $320.00, assumes this works close to its best case.

The case against. Revenue is concentrated in a small number of very large government contracts, so a single program ending, as the Mexico SEDENA work did, can erase tens of millions of quarterly revenue with little notice. The most pessimistic target, $270.00, is roughly what OSIS is worth if this bites instead.

Read the full bull and bear case on OSIS, including what would have to change to break either one. Walnut is not an investment adviser.

A simple financial snapshot. These are approximations and refresh quarterly; for current figures see OSI Systems, Inc.'s investor relations page or your broker.

• Revenue (TTM): ~$1.81B
• Market cap: ~$3.8B
• Fiscal 2026 revenue guidance: ~$1.825B to ~$1.867B
• Fiscal 2026 non-GAAP EPS guidance: ~$10.30 to ~$10.55
• P/E on that guidance: ~22x
• Backlog (Q3 fiscal 2026, record): ~$1.9B

Fiscal years end in June, so the figures above sit between the May 2026 third-quarter report and the fiscal 2026 full-year results and first fiscal 2027 guidance expected later in August. At roughly 22 times guided non-GAAP earnings and about 2.1 times revenue, OSIS is priced closer to a defense prime than to a medical device or electronics manufacturer, which is consistent with where most of its profit comes from. The multiple already reflects the record backlog, so the reported operating margin and the size of new bookings tend to matter more to the share price than the headline revenue beat.

Other names that sit close to OSIS: same theme, named as a direct competitor, or held beside it in the same funds. Each entry says which. Worth a look if you are thinking about diversification within a thesis rather than concentration on one ticker.

There are three common ways to get OSIS exposure. Buy shares (or fractional shares) directly at any major broker. Hold an ETF that includes it, which spreads the position across many companies. Or build it into a focused thematic portfolio, so OSIS sits alongside other stocks that express the same thesis.

Walnut takes the portfolio route. Describe a thesis where OSIS fits (for example “AI infrastructure” or “dividend-growth large-caps”) and the AI proposes 5 to 6 constituents with target weights. You review the plan and fund it through your own broker when you're ready.

New to this? Start with how to invest in stocks, see how to analyze a stock with AI, or compare the best AI stock analyzers.

OSIS is a niche security-screening franchise with a real order book and a lumpy, government-dependent revenue line, and the open question is whether margins and disclosure hold up as the outsized Mexico program rolls off.

Whether OSIS is worth buying today depends more on your time horizon and what you already hold than on any single call. We walk through valuation, what would have to go right, and the risks in is OSIS a buy or a sell?, and where the stock could go from here in the OSIS stock forecast.

For income investors, whether OSIS pays a dividend and how the payout looks is covered in does OSIS pay a dividend? And to weigh OSIS against a peer, read the full side-by-side comparisons: OSIS vs LDOS and OSIS vs LHX.