Electromed, Inc. (ELMD) | Investment Case

1. Company Snapshot

1.a. 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.

Show Full description

1.b. Last Insights on ELMD

Electromed's recent performance is driven by strong Q1 2026 earnings, beating estimates with $0.25 per share, up from $0.16 a year ago. The company's growth prospects are fueled by solid attributes, positioning it for market outperformance. Analysts see a 36.98%-39.2% upside potential, with an upward trend in earnings estimate revisions. Recently upgraded to a Zacks Rank #2 (Buy), Electromed's optimism about earnings prospects is growing. Its participation in investor conferences, including NobleCon21 and LD Micro Main Event XIX, also boosts visibility.

1.c. Company Highlights

Last Price	27.81
Change Percentage	0.04%
Open	28.2
Previous Close	27.8
Market Cap ( Millions)	232
Volume	22102
Year High	35.56
Year Low	17.73
M A 50	25.09
M A 200	22.86

FCF Yield	4.83%
Dividend Yield	0.00%
ROE	17.50%
Debt / Equity	0.00%
Net Debt / EBIDTA	-141.13%
Price To Book	5.36
Price Earnings Ratio	30.75
Price To FCF	20.71
Price To sales	3.62
EV / EBITDA	20.0

2. Electromed Delivers Strong Q1 FY2026 Earnings with 15% Revenue Growth

Electromed reported revenue of $16.9 million for the first quarter of fiscal year 2026, a 15.1% increase year-over-year. Operating income rose to $2.7 million, representing 15.8% of net revenues, compared to $1.9 million or 13.2% of net revenues in the prior year. The company delivered fully diluted EPS of $0.25, beating estimates of $0.22. The strong financial performance was driven by broad-based growth across the company's three primary channels: core home care, distributor sales, and hospital sales. As Jim Cunniff, Electromed's President and CEO, noted, "We're continuing to gain market share as a single product company that's focused on this space."

Publication Date: Nov -18

                                    📋 Highlights
                                    Revenue Growth::
                                                Q1 revenue reached $16.9M, a 15% year-over-year increase, driven by all three core channels.
Operating Income Expansion::
                                                Operating income rose to $2.7M, up 38% YoY, equating to 16% of revenue, reflecting operational efficiency.
Sales Force Expansion::
                                                Direct home care sales reps grew to 57 (from 55 in Q4), supporting long-term home care market leadership.
Hospital Segment Growth::
                                                Hospital business poised for >20% growth as Electromed focuses on fleet upgrades and direct hospital investments.
Competitive Cost Advantage::
                                                Electromed's $10K lifetime device cost contrasts with $85K/year pharmaceutical cost for bronchiectasis treatment.

                                

Segment Performance

The direct home care business saw revenue growth of 12.7% to $14.9 million, driven by the expansion of the direct home care sales force to 57 representatives. The hospital sales channel is expected to drive future growth, with Electromed targeting 20% plus growth in this segment by focusing on upgrading fleets and investing in new equipment.

Valuation and Growth Prospects

With a P/E Ratio of 27.24 and an EV/EBITDA of 17.55, Electromed's valuation suggests that the market has already priced in a significant level of growth. Analysts estimate revenue growth of 14.2% for the next year, which is slightly lower than the current year's growth rate. The company's ROIC of 16.34% and ROE of 17.5% indicate a strong ability to generate returns on invested capital. The current valuation metrics imply that Electromed is expected to continue delivering strong financial performance, driven by its focus on the home care market and investments in its commercial infrastructure.

Future Growth Drivers

Electromed is well-positioned to capitalize on the growing demand for its products, particularly in the neuromuscular segment, where there is a significant unmet need. The company's contract with Visient, representing half of the country's health systems, is also expected to drive growth in the hospital sales channel. With its strong financial performance and growth prospects, Electromed is likely to continue delivering value to patients, providers, and shareholders.

3. NewsRoom

3 Reasons Why Growth Investors Shouldn't Overlook Electromed (ELMD)

Dec -01

Source: zacks.com

Wall Street Analysts See a 36.98% Upside in Electromed (ELMD): Can the Stock Really Move This High?

Dec -01

Source: zacks.com

Electromed, Inc. to Participate in Noble Capital Markets' 21st Annual Emerging Growth Equity Conference

Nov -20

Source: newsfilecorp.com

Best Momentum Stock to Buy for Nov. 17th

Nov -17

Source: zacks.com

Electromed (ELMD) Upgraded to Buy: Here's Why

Nov -14

Source: zacks.com

Wall Street Analysts Think Electromed (ELMD) Could Surge 39.17%: Read This Before Placing a Bet

Nov -14

Source: zacks.com

Electromed, Inc. $ELMD Position Trimmed by Acadian Asset Management LLC

Nov -14

Source: defenseworld.net

Electromed, Inc. (ELMD) Surpasses Q1 Earnings and Revenue Estimates

Nov -13

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.71%)

6. Segments

Medicare

Expected Growth: 7%

Electromed's Medicare segment growth of 7% is driven by increasing adoption of its airway clearance therapy, expansion into new markets, and favorable reimbursement trends. Additionally, the company's focus on patient outcomes, ease of use, and cost-effectiveness has led to increased demand from healthcare providers and patients, contributing to the segment's growth.

Commercial

Expected Growth: 9%

Electromed's 9% commercial growth is driven by increasing adoption of its airway clearance therapy, SmartVest, among cystic fibrosis patients, expansion into new markets, and strategic partnerships with healthcare providers. Additionally, the company's focus on improving patient outcomes and reducing healthcare costs resonates with payers, leading to increased reimbursement rates and revenue growth.

Medicare Supplemental

Expected Growth: 6%

Electromed's Medicare Supplemental segment growth is driven by increasing adoption of airway clearance therapy, expanding sales force, and strategic partnerships. The company's focus on improving patient outcomes and reducing healthcare costs resonates with Medicare patients, contributing to the 6% growth rate.

Institutional

Expected Growth: 5%

Electromed's 5% institutional growth driven by increasing adoption of airway clearance therapy, expansion into new markets, and strategic partnerships. Strong demand from hospitals and clinics for the company's non-invasive ventilator and respiratory care products also contributes to growth. Additionally, investments in sales and marketing efforts, as well as product innovation, support the company's institutional segment expansion.

Home Care Distributor

Expected Growth: 10%

Electromed's Home Care Distributor segment growth is driven by increasing demand for airway clearance therapy, expansion into new geographic markets, and strategic partnerships. Additionally, the company's focus on education and training for healthcare professionals, as well as its investment in digital marketing and e-commerce platforms, contribute to its 10% growth rate.

Medicaid

Expected Growth: 8%

Electromed's Medicaid segment growth of 8% is driven by increasing adoption of its airway clearance therapy, SmartVest, among Medicaid patients with chronic respiratory diseases. Expanding coverage and reimbursement for the therapy, coupled with growing awareness of its benefits, contribute to the growth. Additionally, the company's strategic partnerships with Medicaid providers and advocacy groups also support the segment's expansion.

Other

Expected Growth: 7%

Electromed's 7% growth is driven by increasing adoption of its airway clearance therapy, strong sales of its SmartVest system, and expansion into new markets. Additionally, the company's focus on improving patient outcomes and reducing healthcare costs resonates with customers, leading to increased demand and revenue growth.

International

Expected Growth: 11%

Electromed's 11% international growth is driven by increasing adoption of its airway clearance therapy in emerging markets, expansion into new geographies, and strategic partnerships with local distributors. Additionally, growing awareness of respiratory diseases and increasing healthcare expenditure in these regions contribute to the company's international growth.

7. Detailed Products

SmartVest SQL System

A non-invasive, wearable, and portable airway clearance system designed to help patients with respiratory diseases and conditions, such as cystic fibrosis, chronic obstructive pulmonary disease (COPD), and bronchiectasis.

SmartVest Connect

A remote monitoring and data analytics platform that allows healthcare providers to track patient adherence and treatment outcomes in real-time.

SmartVest SQL System with Quietest Technology

An advanced airway clearance system that combines the SmartVest SQL System with Quietest Technology, which reduces treatment noise levels and enhances patient comfort.

8. Electromed, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Electromed, Inc. faces moderate threat from substitutes, as patients may opt for alternative treatments or therapies for respiratory diseases.

Bargaining Power Of Customers

Electromed, Inc. has a diverse customer base, which reduces the bargaining power of individual customers, giving the company an upper hand in negotiations.

Bargaining Power Of Suppliers

Electromed, Inc. relies on a few key suppliers for components and materials, giving them some bargaining power, but the company's strong relationships and diversified supply chain mitigate this risk.

Threat Of New Entrants

The medical device industry has high barriers to entry, including regulatory hurdles and significant R&D investments, making it difficult for new entrants to compete with Electromed, Inc.

Intensity Of Rivalry

The respiratory therapy market is highly competitive, with several established players, leading to intense rivalry and pricing pressure for Electromed, Inc.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	0.44%
Debt Cost	3.95%
Equity Weight	99.56%
Equity Cost	5.92%
WACC	5.91%
Leverage	0.44%

11. Quality Control: Electromed, Inc. passed 6 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Biotricity

A-Score: 5.2/10

Value: 9.4

Growth: 5.6

Quality: 6.0

Yield: 0.0

Momentum: 10.0

Volatility: 0.3

1-Year Total Return ->

Electromed

A-Score: 4.8/10

Value: 2.9

Growth: 8.7

Quality: 7.8

Yield: 0.0

Momentum: 6.5

Volatility: 3.0

1-Year Total Return ->

Tactile Systems Technology

A-Score: 4.5/10

Value: 5.7

Growth: 7.7

Quality: 7.0

Yield: 0.0

Momentum: 4.0

Volatility: 3.0

1-Year Total Return ->

UFP Technologies

A-Score: 4.0/10

Value: 3.1

Growth: 9.2

Quality: 6.6

Yield: 0.0

Momentum: 1.0

Volatility: 4.3

1-Year Total Return ->

Quipt Home Medical

A-Score: 3.8/10

Value: 8.7

Growth: 6.7

Quality: 3.8

Yield: 0.0

Momentum: 2.5

Volatility: 1.3

1-Year Total Return ->

Sensus Healthcare

A-Score: 3.4/10

Value: 7.5

Growth: 6.6

Quality: 4.2

Yield: 0.0

Momentum: 0.5

Volatility: 1.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

0.23%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

5.91%

Electromed, Inc. - US2854091087

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on ELMD

1.c. Company Highlights

Better Quality

Expensive

Strong Momentum

Earnings Beats

Revenues Miss

Revenues Beats

Higher Growth

Lower Growth

2. Electromed Delivers Strong Q1 FY2026 Earnings with 15% Revenue Growth

Segment Performance

Valuation and Growth Prospects

Future Growth Drivers

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.71%)

6. Segments

Medicare

Expected Growth: 7%

Commercial

Expected Growth: 9%

Medicare Supplemental

Expected Growth: 6%

Institutional

Expected Growth: 5%

Home Care Distributor

Expected Growth: 10%

Medicaid

Expected Growth: 8%

Other

Expected Growth: 7%

International

Expected Growth: 11%

7. Detailed Products

SmartVest SQL System

SmartVest Connect

SmartVest SQL System with Quietest Technology

8. Electromed, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Electromed, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

27.81$

Current Price

27.81$

Potential

0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA