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Investing.com - Lake Street Capital Markets assumed coverage on Electromed (NYSE:ELMD), a medical device company with a market capitalization of $195 million and impressive gross margins of 78%, with a Buy rating and a price target of $36.00 on Wednesday.
The research firm cited Electromed’s strong Q4 results, which exceeded both Lake Street’s and Street expectations, as the company continues to perform well in the bronchiectasis (BE) market, achieving 15% revenue growth over the last twelve months. Lake Street noted that with only 148,000 of the 923,000 diagnosed BE patients in the U.S. currently using High-Frequency Chest Wall Oscillation (HFCWO) therapy, substantial growth opportunity remains. According to InvestingPro analysis, the company’s low P/E ratio relative to its near-term earnings growth suggests potential for value creation.
Lake Street highlighted that approximately 4.0 million people in the U.S. are estimated to have undiagnosed BE, representing further market potential. The recent approval of Insmed’s Brinsupri (brensocatib), which treats inflammation common in BE patients, is expected to raise awareness of the condition. Get deeper insights into Electromed’s growth potential and 6 additional exclusive ProTips with InvestingPro, which rates the company’s overall financial health as EXCELLENT.
The firm believes Electromed can continue adding sales territories at a measured pace to capture market growth, while potentially gaining market share from competitors whose HFCWO products receive proportionally less attention within their parent companies.
Lake Street expects Electromed to maintain consistent double-digit revenue growth in coming years with operating leverage, noting that management’s sales force size and productivity guidance appears conservative as the company plans only approximately 10% expansion in direct salesperson headcount this year. The company’s strong financial position is evidenced by its healthy current ratio of 5.2 and solid cash position exceeding debt obligations.
In other recent news, Electromed Inc . reported impressive fourth-quarter earnings for 2025, surpassing analyst expectations. The company achieved an earnings per share (EPS) of $0.25, exceeding the forecast of $0.22, which marks a 13.64% surprise. Electromed also recorded a quarterly revenue of $17.4 million, outperforming the expected $16.6 million by 4.82%. Following these results, Roth/MKM raised its price target for Electromed from $29.00 to $35.00, while maintaining a Buy rating on the stock. This adjustment comes on the heels of Electromed’s better-than-expected financial performance and its projection of double-digit revenue growth for fiscal year 2026. These developments highlight significant progress in the company’s financial health and market outlook.
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