Is OSI Systems (OSIS) Undervalued As Record Revenue And A US$1.9b Backlog Build?

OSI Systems (OSIS) just closed fiscal 2026 with record revenue and a US$1.9b backlog, supported by fresh US$90m security orders and US$8m in optoelectronics bookings that reinforce demand and near term visibility.

The recent US$90m security orders and US$8m optoelectronics bookings arrive during a weaker run for OSI Systems’ shares, with the 30 day share price return down about 4.6% and the year-to-date share price return down roughly 22.8%. However, the 3 year total shareholder return of about 67.1% and 5 year total shareholder return of roughly 105.5% indicate that longer term holders have still seen solid gains.

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OSI Systems now pairs record orders with a share price that has pulled back sharply in 2026. Does that recent slide already reflect the risks, or are you being compensated for waiting before making an entry?

Most Popular Narrative: 30% Undervalued

On the most followed narrative, OSI Systems is framed against a fair value of about $281, compared with the last close at $197.24. This puts the recent share pullback in a different light and shifts attention to what might be driving that gap.

Record backlog levels, global customer diversification beyond large legacy contracts like Mexico, and increased investment in R&D for differentiated platforms position OSI to accelerate earnings and free cash flow growth, and to better capitalize on long-term secular trends underpinning security and diagnostic infrastructure spending.

See why 5 investors see OSI Systems as 30% undervalued.

Result: Fair Value of $281 (UNDERVALUED)

Still, this narrative could be knocked off course if government security funding is delayed or if OSI Systems’ healthcare division continues to weigh on overall profitability.

Find out about the key risks to this OSI Systems narrative.

Another View: What OSI Systems Looks Like On Cash Flows

The 30% undervalued narrative for OSI Systems focuses on earnings and price targets. A different lens comes from the SWS DCF model, which values the shares at about $78.55 versus the last close at $197.24. On that framework, the stock appears expensive, so investors may consider which perspective aligns better with their own process.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out OSI Systems for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 32 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

Mixed messages around OSI Systems can be confusing, so move quickly from headline takes to hard data and weigh both sides of the story using the 5 key rewards and 1 important warning sign.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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