Highly rated Omnicell stock catapulted and broke out Wednesday after the medications management company obliterated its own earnings expectations.
The Fort Worth, Texas-based company provides pharmacy delivery and systems that manage meds. During the third quarter, Omnicell earned an adjusted 56 cents per share. That handily beat its own outlook for 34 cents to 44 cents a share and the forecast of analysts polled by FactSet for 42 cents.
Chief Executive Randall Lipps said the company's beat shows signs of stabilization, though earnings fell about 10% year over year.
"As the macroeconomic environment within the healthcare sector continues to show signs of stabilization, we believe our outcomes-centric innovation and customer-first focus is resonating with the market," he said in a statement.
Omnicell stock launched 32.2% to close at 53.05. Shares broke out of a flat base with a buy point at 45.84, according to MarketSurge.
Omnicell stock has a strong IBD Digital Relative Strength Rating of 89 out of a best-possible 99. This means its shares rank in the top 11% of all stocks in terms of 12-month performance. Omnicell's relative strength line also reached a new high.
Omnicell Stock: Sales Top Expectations
Sales fell 5% to $282 million, but topped the Street's call for $280.4 million. Third-quarter sales also beat the midpoint of Omnicell's projection for $275 million to $285 million.
"The year-over-year decrease in total revenues reflects the impact of a continued challenging environment for some of our health system customers and the timing of our XT Series automated dispensing systems lifecycle, as we are largely through the replacement cycle," the company said in its news release.
Omnicell also raised its outlook for the year and now expects $1.1 billion to $1.11 billion in sales. That includes $625 million to $630 million in product sales and $475 million to $480 million in service revenue. Further, the company projects adjusted profit of $1.65 to $1.72 per share.
Analysts following Omnicell stock expected $1.09 billion in sales. The earnings outlook also handily beat their forecast for adjusted earnings of $1.43 a share.
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