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1. Company Snapshot

1.a. Company Description

Outset Medical, Inc., a medical technology company, develops a hemodialysis system for dialysis.It provides the Tablo Hemodialysis System, which comprises a compact console with integrated water purification, on-demand dialysate production, and software and connectivity capabilities for dialysis care in acute and home settings.The company was formerly known as Home Dialysis Plus, Ltd.


and changed its name to Outset Medical, Inc.in January 2015.Outset Medical, Inc.


was incorporated in 2003 and is headquartered in San Jose, California.

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1.b. Last Insights on OM

The recent 3 months performance of Outset Medical, Inc. was negatively impacted by a Warning Letter from the FDA in July 2023, which was only recently resolved on February 13, 2025. This regulatory issue likely weighed on investor sentiment and may have contributed to the company's Q4 loss. Additionally, the company's decision to announce a one-for-fifteen reverse stock split on March 18, 2025, may have been perceived as a negative development by some investors.

1.c. Company Highlights

2. Outset Medical's Q3 Earnings: A Mixed Bag

Outset Medical, Inc.'s third-quarter revenue was $29.4 million, representing a modest 3% growth over the same period last year. The company's product revenue was $20.6 million, while service and other revenue contributed $8.9 million. Notably, the non-GAAP gross margin expanded to 39.9%, up 350 basis points from last year, indicating improving profitability. Non-GAAP operating expenses, however, declined 17% to $22.1 million. The company's EPS loss was $0.84, significantly better than the estimated loss of $1.76. With a revised 2025 revenue guidance of $115 million to $120 million, the company expects to use less than $50 million of cash in 2025, a more than 50% reduction in operating cash use from 2024.

Publication Date: Nov -29

📋 Highlights
  • 3% YoY Revenue Growth:: Q3 revenue reached $29.4 million ($20.6M product, $8.9M service).
  • Non-GAAP Margin Expansion:: Gross margin hit 39.9% (+350 bps) and operating expenses fell 17% to $22.1 million.
  • 2025 Revenue Guidance Revised:: Downgraded to $115M–$120M (-~$7M) due to sales leadership transition and delayed deals.
  • Operational Cash Use Cut:: Projected 2025 cash burn under $50 million (>50% reduction from 2024).
  • Sales Leadership Transition:: New sales leader sought for capital equipment expertise to stabilize deal timing and forecasting.

Operational Highlights

The company's technology and expertise in insourcing dialysis continue to gain traction, driven by growing hospital demand due to the clinical, operational, and financial benefits of its proven technology and exceptional service. Outset Medical is searching for a new sales leader with experience in capital equipment, enterprise sales, and health systems conversion, following the departure of its head of sales. The company is confident that hiring a new sales leader will help achieve predictability and consistency around deal close timing.

Guidance Revision and Future Prospects

The company revised its 2025 guidance due to the potential distraction and impact on sales from the change in sales leadership, as well as deal timing issues. Despite a 9% year-over-year decline exiting 2025, Outset Medical remains optimistic about its future growth prospects, citing growing demand for its products and progressing deals in the pipeline. Analysts estimate next year's revenue growth at 9.1%. Management noted that 2026 is a good starting point, but they reserved the right to discuss specifics when providing a full update on 2026 guidance.

Valuation and Metrics

With a P/S Ratio of 0.69, the company's valuation appears reasonable relative to its revenue. However, the negative EPS and ROE of -71.12% raise concerns about its profitability. The EV/EBITDA ratio of -0.71 and ROIC of -29.41% also indicate that the company's financial performance is still a work in progress. As the company focuses on deal timing, forecasting, and getting closer to customers, investors will be watching for signs of improved execution and growth.

3. NewsRoom

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INVESTIGATION ALERT: Edelson Lechtzin LLP Announces Investigation of Outset Medical, Inc. (NASDAQ: OM) and Encourages Investors with Substantial Losses to Contact the Firm

Nov -28

Source: prnewswire.com

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INVESTOR ALERT: Pomerantz Law Firm Investigates Claims On Behalf of Investors of Outset Medical, Inc. - OM

Nov -20

Source: prnewswire.com

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Outset Medical, Gemini Space Station, CoreWeave And Other Big Stocks Moving Lower In Tuesday's Pre-Market Session

Nov -11

Source: benzinga.com

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Outset Medical, Inc. (OM) Reports Q3 Loss, Lags Revenue Estimates

Nov -11

Source: zacks.com

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Outset Medical, Inc. (OM) Q3 2025 Earnings Call Transcript

Nov -11

Source: seekingalpha.com

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Outset Medical Reports Third-Quarter Results

Nov -10

Source: globenewswire.com

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New Research Demonstrates the Advantages of an Insourced Dialysis Service Line for Acute-Care Facilities Using Outset Medical's Tablo® Hemodialysis System

Nov -05

Source: globenewswire.com

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Outset Medical to Present at the 2025 Stifel Healthcare Conference

Nov -05

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.28%)

6. Segments

Consoles

Expected Growth: 9.27%

Outset Medical's Consoles growth is driven by increasing adoption in dialysis clinics, expanding product portfolio, and strategic partnerships. The rising demand for home dialysis and growing need for cost-effective solutions also contribute to the growth. Additionally, the company's focus on innovation and customer-centric approach have led to increased market share and revenue growth.

Consumables

Expected Growth: 8.9%

Outset Medical's Consumables segment growth of 8.9% is driven by increasing adoption of its Tablo Hemodialysis System, expansion into new dialysis clinics, and growing demand for home dialysis treatment. Additionally, the company's strategic partnerships and investments in product development have enhanced its offerings, contributing to the segment's growth.

Service and Other

Expected Growth: 9.9%

Outset Medical's 9.9% growth in Service and Other is driven by increasing adoption of its Tablo Hemodialysis System, expansion into new dialysis clinics, and growing demand for home dialysis services. Additionally, the company's focus on providing comprehensive service and maintenance support to its customers has led to increased revenue from service contracts and consumables sales.

7. Detailed Products

Tablo Hemodialysis System

A novel, all-in-one hemodialysis system designed for use in acute and chronic care settings, offering a more efficient and flexible treatment option for patients and healthcare providers.

Tablo Cartridge

A single-use, disposable cartridge that contains the dialysate and other necessary components for a single hemodialysis treatment, designed for use with the Tablo Hemodialysis System.

8. Outset Medical, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Outset Medical, Inc. faces moderate threat from substitutes, as patients may opt for alternative dialysis methods or delay treatment. However, the company's innovative technology and focus on home dialysis may mitigate this threat.

Bargaining Power Of Customers

Outset Medical, Inc.'s customers, primarily healthcare providers and patients, have limited bargaining power due to the company's unique technology and limited competition in the home dialysis market.

Bargaining Power Of Suppliers

Outset Medical, Inc. has a diversified supplier base, reducing dependence on individual suppliers and minimizing their bargaining power.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the medical device industry, including regulatory hurdles and significant R&D investments required to develop innovative technology.

Intensity Of Rivalry

The intensity of rivalry in the dialysis market is moderate, with a few established players competing for market share. However, Outset Medical, Inc.'s innovative technology and focus on home dialysis may help the company differentiate itself and gain a competitive advantage.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 52.57%
Debt Cost 9.28%
Equity Weight 47.43%
Equity Cost 13.12%
WACC 11.10%
Leverage 110.82%

11. Quality Control: Outset Medical, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Outset Medical

A-Score: 4.5/10

Value: 8.2

Growth: 4.9

Quality: 4.5

Yield: 0.0

Momentum: 8.5

Volatility: 1.0

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Stock-Card
AdaptHealth

A-Score: 4.3/10

Value: 8.0

Growth: 6.4

Quality: 3.7

Yield: 0.0

Momentum: 4.0

Volatility: 3.7

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Stock-Card
CVRx

A-Score: 3.5/10

Value: 6.8

Growth: 4.7

Quality: 3.8

Yield: 0.0

Momentum: 5.0

Volatility: 1.0

1-Year Total Return ->

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Stock-Card
Cytosorbents

A-Score: 3.4/10

Value: 7.6

Growth: 4.7

Quality: 3.9

Yield: 0.0

Momentum: 3.0

Volatility: 1.0

1-Year Total Return ->

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Stock-Card
PAVmed

A-Score: 3.3/10

Value: 5.4

Growth: 7.7

Quality: 6.0

Yield: 0.0

Momentum: 0.0

Volatility: 1.0

1-Year Total Return ->

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Stock-Card
Pacific Biosciences

A-Score: 2.4/10

Value: 6.6

Growth: 2.2

Quality: 2.4

Yield: 0.0

Momentum: 2.0

Volatility: 1.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

4.38$

Current Price

4.38$

Potential

-0.00%

Expected Cash-Flows