Outset Medical (OM) Stock Forecast & Price Target

Outset Medical has demonstrated strong console sales in Q3, surpassing expectations despite a large order delay, which positions the company favorably for reaching profitability driven by ongoing cost reduction and manufacturing efficiency initiatives. The company has shown consistent improvement in gross margins, with an expectation to achieve high-30s gross margins for FY25, which could pave the way toward a future milestone of 50% gross margins. Additionally, the company is on track to meet its less than $50 million cash burn target for 2025, alongside an accelerated consumables ordering expected to stabilize, further enhancing its financial outlook.

Outset Medical has recently lowered its full-year revenue guidance by approximately $7 million at the midpoint, citing expected delays in enterprise deal timing along with a disappointing performance in consumables revenue. Despite solid console revenue, the substantial weakness in consumables, driven by reduced orders from acute care customers, resulted in total revenues falling short of expectations at $29.4 million compared to consensus estimates. Additionally, the departure of Outset Medical's head of sales raises concerns over potential disruptions within the salesforce during an essential period, exacerbating the company's cautious outlook for 2026.