Electromed (ELMD) AI Stock Analysis

• Market Cap: $191.57M
• Dividend Yield: N/A
• Average Volume (3M): 76.56K
• Price to Earnings (P/E): 23.3
• Beta (1Y): 0.79
• Revenue Growth: 16.05%
• EPS Growth: 29.48%
• Country: US
• Employees: 174
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Devices
• EPS (TTM): 0.32
• Shares Outstanding: 8,275,313
• 10 Day Avg. Volume: 142,259
• 30 Day Avg. Volume: 76,556
• PEG Ratio: 0.49
• Price to Book (P/B): 4.24
• Price to Sales (P/S): 2.86
• P/FCF Ratio: 16.53
• Enterprise Value/Market Cap: 0.97
• Enterprise Value/Revenue: 2.70
• Enterprise Value/Gross Profit: 3.45
• Enterprise Value/Ebitda: 14.56
• 1Y Price Target: $37.33
• Price Target Upside: 50.34% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): 1.1
• Revenue Forecast (FY): $71.98M

• Rating: 76 Outperform
• Price Target: $31.00 ▲(24.85% Upside)
• Action: Reiterated Date: 02/11/26
• Date: Action: Reiterated 02/11/26

ELMD scores well on financial strength (expanding profitability, strong returns, and a near debt-free balance sheet) and supportive earnings-call guidance centered on double-digit growth and operating leverage. The score is tempered by a weaker short-term technical backdrop and a relatively high P/E with no dividend yield provided, plus the noted recent slowdown in TTM revenue growth and past cash-flow volatility.

Positive Factors

Balance sheet strength

Electromed’s near-zero leverage and meaningful liquidity create durable financial flexibility for multi-quarter investments or downturns. A strong equity base and cash buffer reduce refinancing risk, support buybacks or targeted growth spend, and preserve optionality for strategic initiatives.

High and expanding margins

Sustained gross margins near the mid-70s plus rising net margin reflect durable unit economics and manufacturing optimization. High margin structure supports reinvestment in sales and education while providing operating leverage that can amplify returns as revenue grows.

Commercial / payer expansion

Broadening payer coverage and CRM/Smart Order adoption deepen distribution and reduce friction to patient access. Combined with salesforce productivity gains and completed manufacturing optimization, these structural go-to-market improvements underpin scalable, repeatable homecare revenue growth over coming quarters.

Negative Factors

Revenue growth deceleration

A notable slowdown in trailing growth versus prior multi-year expansion signals tougher upcoming comparisons or market saturation headwinds. If sustained, slower top-line momentum could limit operating leverage benefits and pressure near-term margin expansion expectations.

Historical cash-flow volatility

Although recent free cash flow improved, prior multi-year variability indicates cash generation is cyclical and subject to operational timing. This history raises the bar for forecasting durable free cash flow, requiring ongoing monitoring of working capital, capex, and the impact of commercial investments.

Under‑penetration & channel concentration

A large education gap and reliance on homecare sales concentrate execution risk: sustained market penetration requires clinician education and payer engagement. Hospital channel softness and concentrated homecare exposure mean adoption obstacles or channel shifts could slow durable revenue growth.

Electromed Business Overview & Revenue Model

Company Description

Electromed, 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 Money

Electromed generates revenue through the sale of its medical devices, particularly the SmartVest, which is sold directly to patients, healthcare providers, and hospitals. The company also earns revenue from ongoing sales of accessories and maintenance services related to its devices. A significant portion of its revenue is derived from reimbursement from government and private insurance plans for the use of its products, as these devices are often covered under health insurance. Additionally, Electromed may benefit from strategic partnerships with healthcare institutions and organizations that facilitate patient access to their products, enhancing their market presence and sales opportunities.

Electromed Financial Statement Overview

Summary

Strong overall fundamentals: consistently rising revenue over multi-year periods, meaningfully expanding margins (TTM gross margin ~78%, net margin ~12%), strong ROE (~19% TTM), and an exceptionally conservative balance sheet with effectively no debt. Key watchouts are the TTM revenue growth slowdown (~4%) and a history of cash-flow variability despite strong recent free cash flow.

Income Statement

ELMD shows strong and improving profitability alongside steady growth. Revenue has expanded consistently across the annual periods (from $35.8M in 2021 to $64.0M in 2025) and remains positive in TTM (Trailing-Twelve-Months) at $68.9M. Margins have expanded meaningfully over time, with TTM gross margin ~78% and net margin ~12% (up from ~5–7% in earlier years), reflecting improving operating leverage. The main weakness is that the most recent TTM revenue growth rate is modest (~4%), a deceleration versus prior annual growth rates, suggesting a slower near-term top-line trajectory.

Balance Sheet

The balance sheet is exceptionally conservative with minimal leverage and strong equity support. Total debt is effectively zero in TTM (Trailing-Twelve-Months), and debt relative to equity is near zero across all periods, limiting financial risk and interest burden. Equity has grown over time (to ~$45.4M TTM), and returns on equity have improved to a strong ~19% TTM (Trailing-Twelve-Months), indicating efficient capital use. A minor drawback is that the company’s strong returns are being generated with very low leverage (a positive for risk), but it can also imply a potentially slower pathway to accelerating growth if management remains extremely conservative on balance sheet deployment.

Cash Flow

Cash generation is solid overall, with TTM (Trailing-Twelve-Months) operating cash flow of ~$9.1M and free cash flow of ~$9.2M, and cash flow broadly tracking earnings (free cash flow is ~95% of net income TTM). The latest periods show healthy conversion and positive free cash flow growth. The key weakness is historical volatility: operating cash flow and free cash flow were negative in 2022 and free cash flow was negative again in 2023, indicating that cash generation has not been uniformly stable through the cycle, even though the recent trend is clearly improved.

Breakdown	TTM	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	68.86M	64.00M	54.72M	48.07M	41.66M	35.76M
Gross Profit	53.87M	49.97M	41.73M	36.52M	31.44M	27.30M
EBITDA	12.76M	10.83M	7.42M	4.62M	3.60M	3.75M
Net Income	8.99M	7.54M	5.15M	3.17M	2.31M	2.36M
Balance Sheet
Total Assets	54.91M	53.80M	52.23M	45.81M	41.36M	37.11M
Cash, Cash Equivalents and Short-Term Investments	13.79M	15.29M	16.08M	7.37M	8.15M	11.89M
Total Debt	0.00	198.00K	87.00K	161.00K	41.00K	87.00K
Total Liabilities	9.47M	10.59M	7.69M	8.14M	7.19M	4.69M
Stockholders Equity	45.44M	43.21M	44.55M	37.67M	34.17M	32.42M
Cash Flow
Free Cash Flow	9.21M	11.09M	8.67M	-401.00K	-2.21M	2.63M
Operating Cash Flow	9.13M	11.39M	9.07M	1.31M	-686.00K	3.08M
Investing Cash Flow	-934.00K	-306.00K	-395.00K	-1.72M	-1.52M	-448.00K
Financing Cash Flow	-10.64M	-11.88M	36.00K	-380.00K	-1.52M	-1.22M

Electromed Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 24.83
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 24.83 is below the 20-day moving average (MA) of 26.69, below the 50-day MA of 27.82, and above the 200-day MA of 23.89, indicating a neutral trend. The MACD of -1.26 indicates Positive momentum. The RSI at 37.51 is Neutral, neither overbought nor oversold. The STOCH value of 17.27 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ELMD.

Electromed Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ELMD	76 Outperform	$191.57M	23.28	20.20%	―	16.05%	29.48%
VMD	72 Outperform	$320.87M	26.04	10.53%	―	18.90%	29.22%
XTNT	66 Neutral	$79.82M	56.27	3.64%	―	16.88%	―
SRTS	65 Neutral	$63.07M	-8.44	-14.85%	―	-13.79%	-132.21%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
INGN	50 Neutral	$158.55M	-7.01	-13.27%	―	4.68%	55.37%
CVRX	45 Neutral	$190.50M	-3.74	-91.88%	―	18.44%	25.42%

Electromed Corporate Events

Electromed Reports Record Q2 2026 Revenue and Profitability

Electromed, Inc., a medical device maker specializing in airway clearance systems such as its SmartVest® product for patients with chronic pulmonary conditions, reported record financial results for its fiscal 2026 second quarter, covering the three months ended December 31, 2025. The company, which targets the large bronchiectasis market primarily through its homecare channel and a growing direct salesforce, continues to operate with no debt and solid liquidity.

In Q2 FY 2026, net revenue rose 16.3% year over year to a record $18.9 million, driven by an 18.4% increase in direct homecare revenue to $17.3 million as more sales representatives and higher productivity per rep boosted performance. Operating income climbed 42.4% to a record $3.6 million, with operating margin improving to 19.2% of net revenue, while net income increased 40.3% to a record $2.8 million, or $0.32 per diluted share, marking the company’s thirteenth consecutive quarter of year-over-year revenue and net income growth.

Gross profit grew to $14.8 million, or 78.4% of net revenue, reflecting higher overall revenue and improved net revenue per device, while SG&A expenses rose 10% to $10.8 million, mainly due to larger sales headcount and higher compensation. Non-homecare revenue totaled $1.6 million, with growth in homecare distributor sales partly offset by declines in hospital and other revenue, indicating continued concentration in the core homecare market.

Electromed ended December 31, 2025, with $13.8 million in cash, $36.2 million in working capital, $45.4 million in total shareholders’ equity, and no debt, despite a $1.5 million cash decline over six months largely driven by $3.8 million of share repurchases. Management highlighted the success of its “Triple Down on Bronchiectasis” marketing campaign in raising physician and patient awareness among an estimated 800,000 diagnosed bronchiectasis patients who may benefit from SmartVest®, underscoring both the growth runway in its niche and a strategic focus on balancing reinvestment with shareholder returns.

The company’s record profitability and sustained multi-year growth streak reinforce its position as a niche leader in airway clearance technology and suggest effective execution of its direct homecare strategy. For investors and other stakeholders, the combination of double-digit revenue gains, expanding margins, ongoing buybacks, and a debt-free balance sheet points to a business generating robust cash flows while pursuing targeted commercial expansion in a specialized respiratory market.

The most recent analyst rating on (ELMD) stock is a Buy with a $36.00 price target. To see the full list of analyst forecasts on Electromed stock, see the ELMD Stock Forecast page.

Electromed Enters New Senior Secured Revolving Credit Facility

On December 16, 2025, Electromed, Inc. entered into a new senior secured credit agreement with BMO Bank N.A. for a $10 million revolving line of credit maturing on December 16, 2026, secured by a first-priority interest in substantially all existing and future assets and subject to customary covenants, indemnities and default provisions. The facility, which bears interest at one-month Term SOFR plus 1.75%, is intended to fund capital expenditures, working capital and general corporate purposes, and imposes ongoing financial covenants including a minimum fixed charge coverage ratio of 1.20x and a maximum total funded debt-to-EBITDA ratio of 2.50x; in connection with the new arrangement, the company terminated its prior credit facility with Choice Financial Group, effectively reshaping its financing structure and liquidity profile.

The most recent analyst rating on (ELMD) stock is a Buy with a $32.00 price target. To see the full list of analyst forecasts on Electromed stock, see the ELMD Stock Forecast page.

Electromed Shareholders Elect Directors and Approve Compensation

At the annual meeting held on November 14, 2025, Electromed, Inc. shareholders elected eight directors for a one-year term. Additionally, they ratified the appointment of RSM US LLP as the independent public accounting firm for the fiscal year ending June 30, 2026, and approved executive compensation on a non-binding basis. The board decided to continue annual votes on executive compensation.

The most recent analyst rating on (ELMD) stock is a Buy with a $36.00 price target. To see the full list of analyst forecasts on Electromed stock, see the ELMD Stock Forecast page.

Electromed Reports Strong Q1 2026 Financial Results

Electromed, Inc. reported strong financial results for the first quarter of fiscal 2026, ending September 30, 2025, marking the twelfth consecutive quarter of year-over-year revenue and net income growth. Net revenues increased by 15.1% to $16.9 million, and net income rose by 44.9% to $2.1 million. The company also completed a manufacturing optimization plan and implemented a new CRM system, enhancing sales productivity and positioning Electromed for future growth. The board approved a $10 million stock repurchase authorization, reflecting confidence in the company’s ongoing performance.

The most recent analyst rating on (ELMD) stock is a Buy with a $35.00 price target. To see the full list of analyst forecasts on Electromed stock, see the ELMD Stock Forecast page.