Tactile Systems Technology (TCMD) AI Stock Analysis

• Market Cap: $317.12M
• Dividend Yield: N/A
• Average Volume (3M): 241.78K
• Price to Earnings (P/E): 19.1
• Beta (1Y): 1.03
• Revenue Growth: 6.76%
• EPS Growth: -41.38%
• Country: US
• Employees: 1,037
• Sector: Healthcare
• Sector Strength: 69
• Industry: Medical - Devices
• EPS (TTM): 0.69
• Shares Outstanding: 23,665,798
• 10 Day Avg. Volume: 261,289
• 30 Day Avg. Volume: 241,775
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.07
• Price to Cash Flow (P/CF): 4.80
• P/FCF Ratio: 4.80
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $21.50
• Price Target Upside: 62.02% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4

Overall, Tactile Systems Technology demonstrates strong financial performance with revenue growth and strategic initiatives for the future. However, cash flow inconsistencies, declining technical indicators, and operational challenges present notable risks. The stock is reasonably valued, but the lack of dividend yield and current market momentum dampen its attractiveness.

Positive Factors

Financial Performance

Fourth-quarter results for Tactile Medical exceeded expectations.

Medicare Business

TCMD's Medicare business, which has been pressured by documentation challenges, saw a return to growth at ~16% Y/Y and 83% Q/Q.

Product Launch

The company launched Nimbl for upper extremity Lymphedema and expanded availability across the US, marking a significant improvement for both portability and ease-of-use.

Negative Factors

AEBITDA Guidance

The AEBITDA guidance for 2025 is significantly lower than expectations, implying a -3% year-over-year growth compared to the previous years of 62% and 25% growth.

Earnings Guidance

The company provided lower guidance for 2025.

Medicare Business Decline

Medicare business for TCMD declined significantly, showing a 41.5% year-over-year decrease, which accelerated compared to the previous quarter.

Tactile Systems Technology Business Overview & Revenue Model

Company Description

Tactile Systems Technology, Inc., a medical technology company, engages in the development and provision of medical devices for chronic diseases in the United States. The company offers Flexitouch Plus system, a pneumatic compression device for the treatment of lymphedema; Entre system, a portable pneumatic compression device that is used for the at-home treatment of venous disorders, such as lymphedema and chronic venous insufficiency, including venous leg ulcers; and AffloVest, a portable high frequency chest wall oscillation test for the treatment of retained pulmonary secretions such as bronchiectasis, cystic fibrosis, and various neuromuscular disorders. The company was incorporated in 1995 and is headquartered in Minneapolis, Minnesota.

How the Company Makes Money

Tactile Systems Technology generates revenue primarily through the sale of its medical devices, particularly the Flexitouch System, to patients, healthcare providers, and institutions. The company also earns income by working with insurance providers to secure reimbursement for its devices, which makes its products more accessible to patients. Furthermore, Tactile Medical invests in clinical research to demonstrate the efficacy and cost-effectiveness of its treatments, thus enhancing its marketability and adoption by healthcare professionals. Significant partnerships with healthcare providers and insurance companies help expand its reach and customer base, contributing to its earnings.

Tactile Systems Technology Financial Statement Overview

Summary

Tactile Systems Technology shows strong revenue growth with effective cost management and improved operational efficiency. However, cash flow inconsistencies and recent profitability challenges need attention.

Income Statement

Tactile Systems Technology has shown consistent revenue growth over the past years, with a notable increase from $187.1M in 2020 to $292.98M in 2024. The gross profit margin has remained robust, reflecting effective cost management. The company has turned around its EBIT and EBITDA from negative figures in earlier years to positive, indicating improved operational efficiency. However, the net profit margin has seen fluctuations, with a decrease in net income from 2023 to 2024, indicating potential challenges in maintaining profitability.

Balance Sheet

The balance sheet of Tactile Systems Technology reflects a strong equity base, with stockholders' equity increasing over the years, reaching $216.6M in 2024. The debt-to-equity ratio has improved significantly due to reduced total debt, enhancing financial stability. The company has maintained a positive equity ratio, showcasing its ability to leverage assets effectively. However, a high cash balance relative to total debt suggests underutilized capital, which could be optimized for growth.

Cash Flow

Cash flow analysis indicates a volatile free cash flow pattern, with the latest year showing zero free cash flow due to zero operating cash flow and capital expenditures. Despite this, previous years had positive free cash flow, suggesting the company can generate cash under stable conditions. The operating cash flow to net income ratio has been inconsistent, highlighting challenges in converting profits into cash. The company should focus on enhancing cash flow stability to support future growth.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
292.98M	274.42M	246.78M	208.06M	187.13M
	Gross Profit
191.20M	195.13M	175.98M	148.21M	132.81M
	EBIT
22.18M	18.04M	-4.59M	-1.76M	-3.63M
	EBITDA
32.37M	24.54M	-9.21M	1.92M	-834.00K
	Net Income Common Stockholders
16.96M	28.52M	-17.87M	-11.81M	-620.00K
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
108.91M	61.03M	38.06M	40.71M	58.56M
	Total Assets
297.92M	281.44M	255.00M	244.27M	174.09M
	Total Debt
18.93M	50.38M	72.23M	83.86M	21.39M
	Net Debt
-75.43M	-10.66M	50.30M	55.63M	-26.46M
	Total Liabilities
81.33M	87.80M	133.60M	116.04M	49.34M
	Stockholders Equity
216.60M	193.64M	121.40M	128.23M	124.75M
Cash Flow		Free Cash Flow
38.15M	33.37M	3.29M	276.00K	503.00K
	Operating Cash Flow
40.66M	35.85M	5.21M	2.63M	2.79M
	Investing Cash Flow
-2.50M	-2.48M	-1.91M	-82.18M	20.18M
	Financing Cash Flow
-4.82M	5.73M	-9.60M	59.93M	2.11M

Tactile Systems Technology Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 13.27
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TCMD, the sentiment is Negative. The current price of 13.27 is below the 20-day moving average (MA) of 13.43, below the 50-day MA of 14.64, and below the 200-day MA of 14.78, indicating a bearish trend. The MACD of -0.52 indicates Negative momentum. The RSI at 42.96 is Neutral, neither overbought nor oversold. The STOCH value of 36.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TCMD.

Tactile Systems Technology Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VMD	70 Outperform	$258.08M	24.06	9.19%	―	22.54%	8.55%
TCMD	67 Neutral	$317.12M	19.11	8.27%	―	6.76%	-41.38%
CLPT	62 Neutral	$311.97M	―	-81.24%	―	31.04%	22.18%
NPCE	57 Neutral	$339.28M	―	-189.35%	―	22.14%	26.94%
VREX	49 Neutral	$323.01M	―	-8.57%	―	-6.49%	-205.13%
Sector *	48 Neutral	$6.35B	1.19	-46.26%	2.67%	19.24%	1.75%
TLSI	46 Neutral	$173.60M	―	271.41%	―	417.83%	-609.71%

Tactile Systems Technology Corporate Events

Tactile Systems Technology Appoints Laura King to Board

Tactile Systems Technology, Inc. has appointed Laura G. King to its Board of Directors, effective January 13, 2025. Ms. King, a seasoned healthcare executive with extensive leadership experience, is expected to bring valuable insights to Tactile Medical as it continues to expand its impact in providing innovative at-home therapies for chronic conditions. Her appointment is seen as a strategic move to leverage her expertise in developing technologies that enhance patient care, potentially strengthening the company’s market position and benefiting stakeholders by improving patient outcomes and healthcare efficiencies.