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Electromed (ELMD)
:ELMD
US Market

Electromed (ELMD) AI Stock Analysis

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Electromed

(NYSE MKT:ELMD)

Rating:77Outperform
Price Target:
$23.00
▲(13.19%Upside)
Electromed's strong financial performance and positive earnings call are the primary drivers of its high score. The company's robust growth, profitability, and strategic initiatives position it well for future success. However, technical analysis suggests caution, and valuation metrics indicate moderate attractiveness.
Positive Factors
Financial Health
The company has $16M in cash, $23M in accounts receivable, no debt, and is the final remaining pure-play in the HFCWO space, making it an attractive takeout target for a larger medtech strategy.
Management and Operations
The new management team and board have accomplished growth through product enhancements, sales force productivity, leaner and more efficient reimbursement, market development efforts, and streamlined operations.
Negative Factors
Market Penetration
As the Company continues to gain traction in the underpenetrated bronchiectasis market, multiple expansion is warranted.

Electromed (ELMD) vs. SPDR S&P 500 ETF (SPY)

Electromed Business Overview & Revenue Model

Company DescriptionElectromed, Inc. develops, manufactures, markets, and sells airway clearance therapy and related products that apply high frequency chest wall oscillation (HFCWO) therapy in pulmonary care for patients of various ages in the United States and internationally. The company offers SmartVest airway clearance system; SmartVest SQL System that consists of an inflatable therapy garment, a programmable air pulse generator, and a patented single-hose that delivers air pulses from the generator to the garment; and SmartVest Connect, a wireless technology with personalized HFCWO therapy management portal for patients with compromised pulmonary function. It also provides single patient use SmartVest and SmartVest Wrap products for health care providers in the acute care setting. The company offers its products primarily to home health care market for patients with bronchiectasis, cystic fibrosis, and neuromuscular disease. Electromed, Inc. markets its products primarily to physicians and health care providers, as well as directly to patients. The company was incorporated in 1992 and is headquartered in New Prague, Minnesota.
How the Company Makes MoneyElectromed generates revenue primarily through the sales of its SmartVest Airway Clearance System and related accessories. The company sells its products directly to patients, hospitals, and other healthcare facilities, as well as through distributors. Revenue is also derived from services associated with these products, such as maintenance and support. Electromed's earnings are significantly influenced by its ability to obtain insurance reimbursements for its products, which is a crucial factor in making the products accessible to patients. The company may also engage in strategic partnerships to expand its market reach and distribution capabilities.

Electromed Earnings Call Summary

Earnings Call Date:May 13, 2025
(Q3-2025)
|
% Change Since: -10.99%|
Next Earnings Date:Sep 02, 2025
Earnings Call Sentiment Positive
Electromed reported strong revenue and net income growth for the 10th consecutive quarter, with significant improvements in gross profit and successful operational initiatives, including a share repurchase program. However, there were declines in non-homecare revenue and an increase in SG&A expenses.
Q3-2025 Updates
Positive Updates
Revenue and Net Income Growth
Electromed reported its 10th consecutive quarter of year-over-year revenue and net income growth. Revenue for Q3 FY2025 was $15.7 million, up 13.1% from the same period a year ago. Net income increased 26.7% year-over-year to $1.9 million.
Operational Initiatives and Expansion
The company has expanded its team of direct sales reps to 55, up from 51 the previous year. A new Veterans Administration direct-to-consumer outreach program was launched in 11 cities, resulting in 1,200 clicks and 1,100 page views.
Gross Profit and Margin Improvement
Gross profit increased to $12.2 million, or 78.0% of net revenues, up from 74.8% in the previous year. The increase was attributed to higher net revenue per device.
Share Repurchase Program
The Board approved a share repurchase of up to $5 million worth of Electromed stock. In Q3, $1.4 million worth of stock was repurchased, bringing fiscal year-to-date repurchases to $6.4 million.
Negative Updates
Non-Homecare Revenue Decline
While homecare distributor revenue grew by 32.8%, hospital revenue decreased by 7.5% and other revenue by 41.5% in Q3 FY2025.
SG&A Expense Increase
Selling, general, and administrative expenses rose by 17.2% to $9.8 million, primarily due to increased salaries and incentive compensation related to a higher average number of personnel.
Company Guidance
During the Electromed third quarter fiscal 2025 earnings call, the company reported a 13.1% year-over-year increase in revenue, reaching $15.7 million, while operating income rose by 16.2% to $2.1 million. Net income saw a significant growth of 26.7%, amounting to $1.9 million or $0.21 per diluted share. The company highlighted its 10th consecutive quarter of revenue and net income growth. Electromed's direct homecare business revenue increased by 14.8% to $14.1 million, with the annualized homecare revenue per sales representative slightly exceeding their target range, reaching $1.028 million. The company maintained a gross margin of 78.0%, up from 74.8% the previous year. Electromed ended the quarter with a cash position of $15.2 million and no debt, underlining a strong financial standing. Additionally, the company emphasized its strategic initiatives to expand its sales force and enhance market awareness, notably through the Triple Down on Bronchiectasis campaign, which garnered over 27,000 page views, aiming to drive prescription growth and awareness for its SmartVest airway clearance technology.

Electromed Financial Statement Overview

Summary
Electromed demonstrates strong financial health across all aspects. The company showcases robust revenue growth and profitability, solid financial stability with no debt, and excellent cash flow generation. These factors position Electromed well for future growth and resilience against market fluctuations.
Income Statement
85
Very Positive
Electromed's income statement reflects strong profitability with a TTM gross profit margin of 76.8% and a net profit margin of 11.3%. Revenue has grown robustly, increasing by 9.0% over the previous annual period, and EBIT margin is healthy at 14.5%. These metrics indicate a well-managed cost structure and operational efficiency.
Balance Sheet
80
Positive
The balance sheet is solid with zero total debt and a strong equity ratio of 83.4%, underscoring financial stability. Return on Equity is impressive at 15.5%, showing effective utilization of equity to generate profits. The absence of debt minimizes financial risk and enhances stability.
Cash Flow
90
Very Positive
Cash flow is exceptionally strong, with a free cash flow growth rate of 28.3% TTM and a high operating cash flow to net income ratio of 1.67, reflecting robust cash generation. The free cash flow to net income ratio of 1.64 indicates excellent liquidity and efficient cash utilization.
BreakdownTTMJun 2024Jun 2023Jun 2022Jun 2021Jun 2020
Income Statement
Total Revenue61.44M54.72M48.07M41.66M35.76M32.47M
Gross Profit47.65M41.73M36.52M31.44M27.30M25.20M
EBITDA9.66M7.42M4.62M3.60M3.75M5.86M
Net Income7.16M5.15M3.17M2.31M2.36M4.16M
Balance Sheet
Total Assets52.45M52.23M45.81M41.36M37.11M33.24M
Cash, Cash Equivalents and Short-Term Investments15.24M16.08M7.37M8.15M11.89M10.48M
Total Debt0.0087.00K161.00K41.00K87.00K81.20K
Total Liabilities8.51M7.69M8.14M7.19M4.69M3.00M
Stockholders Equity43.94M44.55M37.67M34.17M32.42M30.25M
Cash Flow
Free Cash Flow11.92M8.67M-401.00K-2.21M2.63M3.22M
Operating Cash Flow12.02M9.07M1.31M-686.00K3.08M4.20M
Investing Cash Flow-195.00K-395.00K-1.72M-1.52M-448.00K-977.20K
Financing Cash Flow-8.30M36.00K-380.00K-1.52M-1.22M-548.03K

Electromed Technical Analysis

Technical Analysis Sentiment
Negative
Last Price20.32
Price Trends
50DMA
21.34
Negative
100DMA
23.49
Negative
200DMA
25.26
Negative
Market Momentum
MACD
0.10
Negative
RSI
42.69
Neutral
STOCH
56.44
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ELMD, the sentiment is Negative. The current price of 20.32 is below the 20-day moving average (MA) of 20.79, below the 50-day MA of 21.34, and below the 200-day MA of 25.26, indicating a bearish trend. The MACD of 0.10 indicates Negative momentum. The RSI at 42.69 is Neutral, neither overbought nor oversold. The STOCH value of 56.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ELMD.

Electromed Peers Comparison

Overall Rating
UnderperformOutperform
Sector (46)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
VMVMD
80
Outperform
$279.83M23.739.79%19.97%17.21%
77
Outperform
$170.41M25.4616.56%14.85%64.96%
66
Neutral
$77.29M42.773.46%24.75%-61.29%
56
Neutral
$275.75M0.65%61.50%34.99%
55
Neutral
$190.90M-14.10%5.73%72.50%
46
Neutral
$108.29M-60.68%19.84%5.77%
46
Neutral
C$194.85M-4.28-8.56%2.84%13.52%-1.74%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ELMD
Electromed
20.32
6.11
43.00%
SNWV
Sanuwave Health
31.72
24.97
369.93%
INGN
Inogen
7.42
-0.83
-10.06%
SRTS
Sensus Healthcare
4.70
-0.65
-12.15%
VMD
Viemed Healthcare
7.08
0.68
10.62%
LUNG
Pulmonx
2.72
-3.77
-58.09%

Electromed Corporate Events

Stock BuybackBusiness Operations and StrategyFinancial Disclosures
Electromed Reports Strong Q3 2025 Financial Results
Positive
May 13, 2025

Electromed, Inc. reported its fiscal 2025 third-quarter results, highlighting a 13.1% increase in net revenue to $15.7 million and a 16.2% rise in operating income to $2.1 million, marking the tenth consecutive quarter of year-over-year growth. The company also announced a $5 million stock repurchase authorization and emphasized its strategic initiatives, including a Veterans Administration outreach program, which contributed to the growth in its direct homecare business, reflecting its strong market positioning and commitment to value creation for shareholders.

The most recent analyst rating on (ELMD) stock is a Buy with a $26.00 price target. To see the full list of analyst forecasts on Electromed stock, see the ELMD Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 03, 2025