Incannex Healthcare stock tumbles after filing $100M offering
On Tuesday, Piper Sandler analysts adjusted their stance on Tactile Systems Technology stock (NASDAQ:TCMD), downgrading the rating from Overweight to Neutral and significantly lowering the price target to $14.00 from the previous $25.00. This decision followed Tactile Systems’ recent announcement of its first-quarter performance, which fell short of revenue and adjusted earnings per share (EPS) expectations. The company, which has maintained revenue growth of 6.76% over the last twelve months and carries a "GREAT" financial health score according to InvestingPro, revised its full-year 2025 guidance downward.
The downgrade by Piper Sandler stems from concerns about the company’s future business visibility. Analysts at the firm expressed doubts regarding the revised FY2025 guidance, suggesting it might still be overly optimistic. They pointed to the significant changes within the company’s lymphedema commercial team and the challenges that typically accompany such salesforce overhauls. InvestingPro data shows that two analysts have recently revised their earnings expectations downward for the upcoming period, though the company maintains strong fundamentals with a current ratio of 4.36x and more cash than debt on its balance sheet.
Despite a strong quarter for the company’s Afflovest product, analysts noted that the raised expectations for this segment of the business now seem ambitious. The analysts acknowledged that Tactile Systems’ stock, trading at a P/E ratio of 19.86x and generating a significant free cash flow yield, does not appear particularly overvalued but recommended that investors adopt a wait-and-see approach due to the current uncertainties surrounding the company’s performance and outlook. According to InvestingPro’s Fair Value analysis, the stock currently appears undervalued, with additional insights available in the comprehensive Pro Research Report.
Piper Sandler’s downgrade and price target reduction reflect a cautious perspective on Tactile Systems Technology, considering the mixed results and operational concerns. The new price target of $14.00 represents a significant decrease from the prior target of $25.00, indicating a more conservative valuation of the company’s stock by the firm’s analysts. Despite these concerns, the company maintains solid fundamentals with a gross profit margin of 74% and positive return on assets of 5.85%.
In their comments, Piper Sandler analysts conveyed a sense of prudence, suggesting that while Tactile Systems’ stock may not be expensive, the current business environment and internal changes warrant a more reserved investment approach. They summarized their position by stating, "We concede the stock doesn’t screen particularly expensive, but we are more comfortable recommending investors take a wait-and-see approach for now."
In other recent news, Tactile Systems Technology Inc . reported its financial results for the first quarter of 2025, revealing earnings and revenue that fell short of analyst expectations. The company posted an earnings per share (EPS) of -$0.13, missing the forecasted -$0.08, and reported revenue of $61.3 million, which was below the anticipated $64.49 million. Tactile Systems experienced a net loss of $3.0 million for the quarter, with its lymphedema product line seeing a 3% year-over-year decline, although its airway clearance products grew by 22%. Despite these challenges, the company maintained a strong gross margin of 74%, an improvement from the previous year’s 71%. Tactile Systems has set a full-year 2025 revenue guidance range of $309-$350 million, focusing on technology investments and sales force expansion to drive future growth. The company’s leadership expressed optimism about the future, emphasizing strategic investments and operational enhancements as key to long-term success. In other developments, Tactile Systems continues to face risks such as increased competition and macroeconomic pressures, which could impact its market share and consumer spending in healthcare.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.