Tactile Systems Technology (TCMD) AI Stock Analysis

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Tactile Systems Technology

(NASDAQ:TCMD)

60Neutral

Tactile Systems Technology's overall stock score reflects robust financial performance and a fair valuation, yet is tempered by technical weaknesses and mixed earnings call results. Despite strong growth in certain segments and strategic investments, challenges in sales productivity and profitability weigh on the score. The stock appears undervalued but faces short-term operational hurdles.

Positive Factors

Cash Reserves

With over $83.6 million in cash on its books and a durable gross margin profile, this is one of the rare profitable assets in small-cap medtech, likely providing support for the stock.

Financial Performance

Fourth-quarter results for Tactile Medical exceeded expectations.

Product Launch

Tactile Systems Technology launched Nimbl, a portable and user-friendly device for lymphedema, expanding access for many patients.

Negative Factors

Earnings Guidance

The AEBITDA guidance for 2025 is significantly lower than expectations, indicating a slowdown in expected earnings.

Growth Concerns

The downgrade from Buy to Neutral reflects concerns over the company's growth prospects and ongoing legal challenges.

Sales Challenges

The miss stemmed from weaker lymphedema sales due to higher-than-expected sales rep turnover and productivity headwinds associated with implementing a new CRM system.

Tactile Systems Technology (TCMD) vs. S&P 500 (SPY)

Market Cap

$230.16M

Dividend YieldN/A

Average Volume (3M)197.17K

Price to Earnings (P/E)14.9

Beta (1Y)1.04

Revenue Growth5.96%

EPS Growth-43.83%

CountryUS

Employees1,037

SectorHealthcare

Sector Strength60

IndustryMedical - Devices

Share Statistics

EPS (TTM)-0.13

Shares Outstanding23,248,352

10 Day Avg. Volume178,625

30 Day Avg. Volume197,174

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.19

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit1.26

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$16.00

Price Target Upside61.62% Upside

Rating ConsensusHold

Number of Analyst Covering4

Tactile Systems Technology Business Overview & Revenue Model

Company DescriptionTactile 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 MoneyTactile 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 exhibits strong revenue growth and improved operational performance. The balance sheet is solid, with reduced debt and increasing equity, reflecting financial stability. However, cash flow inconsistencies and recent profitability challenges indicate areas needing attention.

Income Statement

Positive

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

Very Positive

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

Positive

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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
292.98M	274.42M	246.78M	208.06M	187.13M
	Gross Profit
216.69M	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
45.11M	50.38M	72.23M	83.86M	21.39M
	Net Debt
-49.26M	-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 Price9.90

Price Trends

50DMA

13.64

Negative

100DMA

15.46

Negative

200DMA

14.93

Negative

Market Momentum

MACD

-0.25

Positive

RSI

20.79

Positive

STOCH

30.35

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 9.9 is below the 20-day moving average (MA) of 13.56, below the 50-day MA of 13.64, and below the 200-day MA of 14.93, indicating a bearish trend. The MACD of -0.25 indicates Positive momentum. The RSI at 20.79 is Positive, neither overbought nor oversold. The STOCH value of 30.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TCMD.

Tactile Systems Technology Risk Analysis

Tactile Systems Technology disclosed 71 risk factors in its most recent earnings report. Tactile Systems Technology reported the most risks in the “Tech & Innovation” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Tactile Systems Technology Peers Comparison

Overall Rating

UnderperformOutperform

Sector (52)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VMD	76 Outperform	$292.48M	26.94	9.19%	―	22.54%	8.55%
CLPT	61 Neutral	$366.81M	―	-81.24%	―	31.04%	22.18%
TCMD	60 Neutral	$230.16M	14.95	8.12%	―	5.96%	-43.83%
Sector *	52 Neutral	$5.24B	3.76	-41.88%	2.85%	17.01%	0.78%
TLSI	50 Neutral	$165.88M	―	271.41%	―	169.66%	28.89%
VREX	48 Neutral	$340.31M	―	-8.57%	―	-6.49%	-205.13%
NPCE	45 Neutral	$392.38M	―	-189.35%	―	22.14%	26.94%

* Healthcare Sector Average

Performance Comparison

TCMD

Tactile Systems Technology

9.90

-3.95

-28.52%

CLPT

ClearPoint Neuro

13.11

7.12

118.86%

VREX

Varex Imaging

8.26

-7.49

-47.56%

VMD

Viemed Healthcare

7.40

0.13

1.79%

TLSI

TriSalus Life Sciences

5.14

-4.52

-46.79%

NPCE

NeuroPace

11.69

-0.91

-7.22%

Tactile Systems Technology Earnings Call Summary

Earnings Call Date:May 05, 2025

(Q1-2025)

% Change Since: -28.98%|

Next Earnings Date:Aug 11, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed outlook. While there are positive developments in the airway clearance segment and operational improvements, challenges persist in the lymphedema segment with decreased revenue, higher costs, and lower productivity due to sales vacancies and CRM implementation. The company's strategic investments are expected to drive future growth, but current financial metrics show pressure on profitability.

Q1-2025 Updates

Positive Updates

Airway Clearance Revenue Increase

The airway clearance segment saw a significant increase in revenue, up 22% year-over-year to $10.7 million. This growth underscores the quality of the product and strategic execution.

Gross Margins Improvement

Gross margins increased by 290 basis points year-over-year, attributed to lower manufacturing and warranty costs.

Strong Cash Position

The company ended the quarter with a solid cash position of $83.6 million.

Salesforce CRM Implementation

Successful on-time launch of Salesforce CRM module to enhance sales productivity and operational efficiency.

AffloVest Market Growth

AffloVest sales increased 22% year-over-year, supported by strategic partnerships and market penetration.

Negative Updates

Lymphedema Revenue Decline

Lymphedema product sales decreased by 3% to $50.6 million due to sales headcount vacancies and lower sales productivity from the CRM transition.

Adjusted EBITDA Decrease

Adjusted EBITDA decreased by 125% year-over-year, driven by planned technology investments and other strategic initiatives.

Sales Headcount Challenges

Decline in sales headcount due to strategic optimization led to a higher than expected vacancy rate, impacting sales productivity.

Revised Revenue Guidance

Full-year revenue guidance revised down to $309 million to $315 million due to the impacts of sales headcount vacancies and CRM implementation.

Net Loss Increase

Net loss increased by 35% to $3 million, reflecting increased operating expenses and strategic investments.

Company Guidance

During the first quarter of 2025 earnings call, Tactile Medical provided updated guidance reflecting anticipated revenue growth and strategic investments. Total revenue for Q1 grew 0.3% year-over-year to $61.3 million, with lymphedema revenue decreasing by 3% to $50.6 million and airway clearance revenue increasing by 22% to $10.7 million. Gross margins improved by 290 basis points, while adjusted EBITDA decreased by 125% due to planned investments in technology, including the launch of a new Salesforce CRM module. The company ended the quarter with a robust cash position of $83.6 million. As a result of sales vacancies and CRM implementation impacts, Tactile adjusted its full-year revenue guidance to a range of $309 million to $315 million, representing a growth rate of approximately 5% to 8%. Lymphedema product line growth is expected to be 4% to 5%, while airway clearance is projected to grow 20% to 23%. The strategic investments aim to enhance sales productivity and efficiency, with over 300 reps expected by year-end 2025, the highest in the company's history.

Tactile Systems Technology Corporate Events

Executive/Board Changes

Tactile Systems Technology Appoints Laura King to Board

Positive

Jan 13, 2025

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.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.