Outset Medical (OM) Stock Price Plunges 43.3%, Extending Losses

The Outset Medical Inc (NASDAQ: OM) stock price plunged 43.28%, extending yesterday’s losses after releasing its preliminary financial results for the third quarter ended Sept. 30, 2023, and providing an update on its financial guidance for 2023.

Outset Medical witnessed a significant drop in its stock price following the announcement of lower-than-expected preliminary third-quarter revenue and a warning about reduced capital spending in the fourth quarter. 

The company's stock plunged 34% to $4.45 in after-hours trading, already falling by 11% at Thursday's close. This marks a 74% decrease in the company’s share price this year.

Outset Medical, headquartered in San Jose, California, disclosed that its revenue in the third quarter increased by 9% to $30.4 million, per preliminary results. However, this figure fell short of the $36 million forecast made by analysts, according to FactSet.

The company also revised its full-year revenue projection to $130 million, in contrast to the previous guidance of $140 million to $150 million. Analysts polled by FactSet had expected revenue to reach $144.6 million.

CEO Leslie Trigg noted that the company experienced a more significant impact in the field than expected due to a recent Food and Drug Administration (FDA) warning letter. Additionally, they anticipate challenges arising from a more cautious approach to capital spending in the fourth quarter.

Leslie Trigg, Outset Medical’s Chair and CEO, said: “Growth in the quarter was dampened by a larger-than-expected impact in the field from the recent FDA warning letter and early signs of a more cautious outlook on capital spending that we see as a headwind continuing through the fourth quarter. Importantly, we did not see deals fall out of our pipeline, and our economic value proposition remains resonant and differentiated. Our confidence around generating sustained long-term growth and reaching profitability remains high.” 

Outset Medical (OM) share price. 

The Outset Medical (OM) stock price fell 43.28% to trade at $3.84, adding to yesterday’s 11.33% decline.