Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at OSI Systems (NASDAQ: OSIS) and its peers.
Companies in this sector, especially if they invest wisely, could see demand tailwinds as the world moves towards more IoT (Internet of Things), automation, and analytics. Enterprises across most industries will balk at taking these journeys solo and will enlist companies with expertise and scale in these areas. However, headwinds could include rising competition from larger technology firms, as digitization lowers barriers to entry in the space. Additionally, companies in the space will likely face evolving regulatory scrutiny over data privacy, particularly for surveillance and security technologies. This could make companies have to continually pivot and invest.
The 8 specialized technology stocks we track reported a very strong Q3. As a group, revenues beat analysts’ consensus estimates by 3.2% while next quarter’s revenue guidance was in line.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 9.8% since the latest earnings results.
OSI Systems (NASDAQ: OSIS)
With security scanners deployed at airports and borders worldwide and patient monitors used in hospitals across the globe, OSI Systems (NASDAQ: OSIS) designs and manufactures specialized electronic systems for security screening, patient monitoring, and optoelectronic applications.
OSI Systems reported revenues of $384.6 million, up 11.8% year on year. This print exceeded analysts’ expectations by 4.9%. Overall, it was a strong quarter for the company with a solid beat of analysts’ revenue estimates and full-year revenue guidance slightly topping analysts’ expectations.
The stock is up 7.6% since reporting and currently trades at $262.42.
Best Q3: Napco (NASDAQ: NSSC)
Protecting everything from schools to government facilities since 1969, Napco Security Technologies (NASDAQ: NSSC) manufactures electronic security devices, access control systems, and communication services for intrusion and fire alarm systems.
Napco reported revenues of $49.17 million, up 11.7% year on year, outperforming analysts’ expectations by 4.8%. The business had an incredible quarter with a beat of analysts’ EPS and revenue estimates.
The market seems unhappy with the results as the stock is down 6% since reporting. It currently trades at $41.51.
Is now the time to buy Napco? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: Cognex (NASDAQ: CGNX)
Founded in 1981 when computer vision was in its infancy, Cognex (NASDAQ: CGNX) develops machine vision systems and software that help manufacturers and logistics companies automate quality inspection and tracking of products.
Cognex reported revenues of $276.9 million, up 18% year on year, exceeding analysts’ expectations by 5.2%. It was a satisfactory quarter as it also posted an impressive beat of analysts’ revenue estimates but a significant miss of analysts’ full-year EPS guidance estimates.
As expected, the stock is down 26.3% since the results and currently trades at $34.95.
Read our full analysis of Cognex’s results here.
Mirion (NYSE: MIR)
With its technology protecting workers in over 130 countries and equipment used in 80% of cancer centers worldwide, Mirion Technologies (NYSE: MIR) provides radiation detection, measurement, and monitoring solutions for medical, nuclear energy, defense, and scientific research applications.
Mirion reported revenues of $223.1 million, up 7.9% year on year. This number was in line with analysts’ expectations. Overall, it was an exceptional quarter as it also recorded a beat of analysts’ EPS estimates and an impressive beat of analysts’ full-year EPS guidance estimates.
The stock is down 3.3% since reporting and currently trades at $24.35.
Read our full, actionable report on Mirion here, it’s free for active Edge members.
Zebra (NASDAQ: ZBRA)
Taking its name from the black and white stripes of barcodes, Zebra Technologies (NASDAQ: ZBRA) provides barcode scanners, mobile computers, RFID systems, and other data capture technologies that help businesses track assets and optimize operations.
Zebra reported revenues of $1.32 billion, up 5.2% year on year. This result met analysts’ expectations. It was a strong quarter as it also put up revenue guidance for next quarter exceeding analysts’ expectations and a beat of analysts’ EPS estimates.
Zebra had the weakest performance against analyst estimates among its peers. The stock is down 15.4% since reporting and currently trades at $262.81.
Read our full, actionable report on Zebra here, it’s free for active Edge members.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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