We came across a bullish thesis on Omnicell, Inc. on Danny’s Substack by Danny Green. In this article, we will summarize the bulls’ thesis on OMCL. Omnicell, Inc.’s share was trading at $38.61 as of February 18th. OMCL’s trailing P/E was 912.50 according to Yahoo Finance.
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Omnicell, Inc., together with its subsidiaries, provides medication management solutions and adherence tools for healthcare systems and pharmacies the United States and internationally. OMCL is positioning itself for transformative growth as it shifts from hardware-driven revenue toward a software- and services-led model.
Currently generating around $1.18 billion in revenue, the company aims to double sales to approximately $2.4 billion by 2031, driven primarily by high-margin SaaS offerings and Expert Services. Strategic acquisitions, such as ANiGENT in October 2025, are expanding Omnicell’s footprint in drug diversion detection, further enhancing recurring revenue streams.
While hardware sales, including the XT cabinet replacement cycle, are becoming cyclical, long-term growth is expected from the broader vision of an “Autonomous Pharmacy,” where AI and robotics manage 100% of medication handling—an imperative as healthcare labor shortages intensify toward 2030. Omnicell’s competitive advantage lies in high switching costs, over 900 patents, and a massive installed base that fuels proprietary AI capabilities, though competitors like Becton Dickinson pose a persistent threat, requiring constant innovation.
The company’s culture emphasizes mission-driven innovation, evidenced by its Austin Innovation Lab, though field service roles face operational friction. Customers value Omnicell for time-saving automation that reduces clinician burnout, despite regulatory delays in product rollouts. As recurring revenue grows to nearly 50% of total revenue, margins are expected to expand from low teens to the mid-20s, while strategic tuck-in acquisitions and debt reduction strengthen the balance sheet.
The bull case envisions a potential fivefold valuation increase if ARR exceeds $1.5 billion and the market re-rates Omnicell from a traditional medical equipment multiple to a Healthcare IT multiple. Current market perception lags behind this transition, viewing the company primarily as a hardware vendor, leaving a significant opportunity for rerating as execution of Titan XT and SaaS expansion proves successful.
Previously, we covered a bullish thesis on Quipt Home Medical Corp. (QIPT) by Inflexio Research in March 2025, highlighting its recurring revenue, undervaluation, activist involvement, and potential buyout catalysts. QIPT’s stock price has appreciated by approximately 56.30% since our coverage. Danny Green shares a similar view but emphasizes Omnicell, Inc.’s OMCL shift to software- and services-led revenue, recurring revenue growth, and the Autonomous Pharmacy vision.
Omnicell, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 26 hedge fund portfolios held OMCL at the end of the third quarter which was 22 in the previous quarter. While we acknowledge the risk and potential of OMCL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than OMCL and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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Disclosure: None.
