OSI Systems' (OSIS) expansion and diversification of growth runways for its Security segment will position it for strong fiscal 2026 book-to-bill prospects, Oppenheimer said in a Friday note.

The segment posted a record backlog of $1.5 billion, achieved despite the wind-down of major projects in Mexico, Oppenheimer analysts said. The broadening and diversification of project types, including the adoption of new screening technologies for ports and borders globally, were evident in fiscal Q4, they added.

The analysts said their positive expectations on prospects for the Security segment's fiscal 2026 backlog reflects the company's comments on global growth in cargo/ports and borders security markets, where OSI holds "significant" market share leadership, especially for larger projects.

Additional growth drivers include growing market share in the Aviation markets, accelerated services growth, and project wins for the Defense sector acquisition, the analysts said.

Oppenheimer raised its price target to $280 from $270 while keeping its outperform rating.

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