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Investing.com - Piper Sandler has raised its price target on Tactile Systems Technology (NASDAQ:TCMD) to $20.00 from $14.00 while maintaining a Neutral rating on the stock. The new target aligns closely with InvestingPro’s Fair Value assessment, suggesting the stock may be undervalued at its current price of $15.77.
The revision follows Tactile Systems’ third-quarter results, which exceeded revenue estimates with strong performance in both its Lymphedema and AffloVest business segments. The company has demonstrated solid financial health, with InvestingPro data showing a 9.28% revenue growth over the last twelve months and a positive diluted EPS of $0.77.
The medical technology company has increased its fiscal year 2025 guidance by $6.5 million at the midpoint to a range of $317-$321 million, reflecting continued strength in the AffloVest business, which is now projected to grow 50-52% year-over-year for fiscal 2025.
Piper Sandler noted that the company’s lymphedema business, which represents approximately 85% of total revenues, is benefiting from increased productivity from an expanded sales force.
Despite the improved outlook, the research firm remains cautious about visibility into ongoing trends in the lymphedema segment after two consecutive guidance reductions earlier in the year, citing a need to see more consistency before taking a more positive stance on the stock.
In other recent news, Tactile Systems Technology reported impressive third-quarter financial results for 2025, significantly exceeding market expectations. The company achieved an earnings per share (EPS) of $0.36, which was more than double the forecasted $0.17, resulting in an EPS surprise of 111.76%. Revenue for the quarter reached approximately $85.8 million, surpassing consensus estimates of $79.3 million and reflecting a year-over-year growth of 17.3%. Notably, Airway Clearance products experienced a remarkable 71.2% increase in sales compared to the previous year, while Lymphedema sales grew by 10.9%.
Furthermore, BTIG upgraded Tactile Systems from Neutral to Buy, setting a price target of $28.00. The upgrade was based on strong financial results and a valuation that represents a discount to peers. These developments suggest positive momentum for the company, as indicated by the recent analyst upgrade.
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