What happened

Shares of Omnicell (OMCL 0.42%), which makes pharmacy management solutions for healthcare systems and pharmacies, dropped 33.6% this week, according to data from S&P Global Intelligence. The stock closed last week at $77.96, then opened on Monday at $77.63. The stock hit its 52-week low on Thursday afternoon, when it fell more than $30 from where it had been on Tuesday to $48.52, before closing on Friday at $51.77. Its 52-week high is $187.29. The stock is down more than 71% so far this year.

So what

Investors reacted negatively when the healthcare company slashed its guidance in its third-quarter earnings report Wednesday morning. The company downgraded its annual revenue, earnings per share (EPS), and earnings before interest, taxes, depreciation, and amortization (EBITDA).

It expects full-year revenue to be between $1.284 billion and $1.294 billion, down from between $1.385 billion and $1.41 billion. It also said it now expects EBITDA to run between $177 million and $183 million, down from between $243 million and $255 million, and annual EPS to be between $2.73 and $2.83, compared to earlier estimates of between $3.85 and $4.05.

On the earnings call, Omnicell founder and CEO Randall Lipps chalked up the lowered guidance to headwinds in the industry from labor challenges to health system capital budget freezes and delays.

The rest of the earnings report was mixed. While the company reported revenue of $348 million, up 17% year over year, net income was $17 million and EPS was $0.37, down 41.3% and 39.3%, respectively, over the same period in 2021.

Now what

Omnicell is really a victim of its own success and investors have grown to expect more positive earnings news. The company has increased revenue for nine consecutive quarters and increased net income for five consecutive years, but its margins have thinned a bit this year. Lipps said the company would look to trim expenses and double down on marketing its cloud-based Advanced Services systems. The company has a strong base and has long-term contracts with 152 of the top 300 health systems, it said.