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OSI Systems, Inc. (OSIS) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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OSI Systems, Inc. (OSIS)

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Intrinsic Value (DCF)

Current$290.80
→
Intrinsic$50.12
-83%
$23.52$50.12$100.65
Current price reflects execution expectations above 17% growth — not unreasonable for quality businesses.
Range: Bear $24 → Bull $101. Current price implies expectations above the base case, closer to bull expectations.
Current price reflects assumptions at the upper end of our valuation range (bull case: $101).
Discount ↓Growth →13%15%17%19%
8%$68$76$86$95
10%$38$44$50$57
12%$21$26$31$36
14%$11$14$18$22

Bull Case

  • Bull case ($101) with 20% growth, 9% discount rate

Bear Case

  • Bear case ($24) implies 92% downside at 13% growth, 12% discount
  • Trading 83% above base case — execution must exceed assumptions to justify
  • Price exceeds bull case ($101) — requires exceptional execution
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5-Year Free Cash Flow Projection

Year 1$65.38M
Year 2$76.20M
Year 3$88.81M
Year 4$103.51M
Year 5$120.64M
Terminal$1.78B

📐 Model Inputs

Growth Rate16.6%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$56.09MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is OSIS stock undervalued or overvalued?
🔴 OVERVALUED

OSIS trades at $290.80 vs. our DCF-derived intrinsic value of $50.12, implying -82% downside. Using a 10.0% WACC and 16.6% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($89.32) suggests limited upside.

What is OSIS's intrinsic value?

Using a 5-year DCF model: Base FCF of $56M, projected at 16.6% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $576M net debt and dividing by 0.02B shares: Bear $22.84 | Base $50.12 | Bull $89.32. Current price $290.80 implies -82% to base case.

How is OSIS's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 16.6% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($1.44B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 25.6x.