Shares of Tactile Systems Technology (NASDAQ:TCMD) have sank 19% over the past three months, but are up 34.7% in the past year.
The stock has some catalysts that could make shares surge soon. Thus, I am bullish on this company.
Based in Minneapolis, Minnesota, Tactile Medical is a developer of at-home therapy devices for people suffering from chronic swelling conditions.
These devices are helping U.S. patients with lymphedema and chronic venous insufficiency.
The company also provides care services through a national network of various professionals and clinicians. (See TCMD stock charts on TipRanks)
From the Second Quarter Report
Despite headwinds due to restrictions adopted by healthcare facilities to prevent the spread of the COVID-19 virus, Tactile Systems increased its Q2 revenue by 45% year-over-year to $51.1 million.
The improvement generated a net profit of $1.3 million, or a diluted EPS of $0.07, representing a reversal from the net loss of $13.9 million, or $0.72 per diluted share, for the same quarter of the year before.
The balance sheet had $49 million in cash and cash equivalents as of June 30, 2021, while the total debt was $20.5 million.
Better Outlook Ahead
An increasing number of healthcare organizations and clinics will ease restrictions going forward, allowing Tactile Systems to increase revenues as patient throughputs get more and more similar to pre-pandemic levels.
Additionally, the company will try to improve the efficiency of its salespeople, and have other healthcare professionals prescribe Tactile Systems' solutions.
Furthermore, Tactile Systems announced the acquisition of a respiratory therapy device from privately held manufacturer International Biophysics Corporation earlier in September.
The at-home therapy is possible thanks to a wearable and battery-powered vest that treats patients with chronic respiratory conditions resulting from cystic fibrosis and other neuromuscular disorders.
The company expects total revenue to be between $216.3 million and $224.5 million in Fiscal Year 2021, a 16% to 20% year-over-year increase.
Wall Street’s Take
In the past three months, two Wall Street analysts have issued a 12-month price target for Tactile Systems Technology. The average Tactile Systems Technology price target is $71.50, implying 61.8% upside. The analyst rating consensus is a Moderate Buy rating, based on two Buys.
Summary
This company is well-positioned to post higher revenues for much better margins, potentially driving up the share price.
Disclosure: At the time of publication, Alberto Abaterusso did not have a position in any of the securities mentioned in this article.
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