We came across a bullish thesis on Viemed Healthcare, Inc. (VMD) on Substack by Petty Cash. In this article, we will summarize the bulls’ thesis on VMD. Viemed Healthcare, Inc. (VMD)’s share was trading at $9.51 as of Nov 11th. VMD’s trailing P/E was 38.08 according to Yahoo Finance.
A patient in a clinic, taking a medication dose from a nebulizer to treat a respiratory disease.
VMD recently reported its quarterly results, which exceeded expectations, following a strong 25% surge over the past six weeks. The company posted a revenue of $58 million, up 15% year-over-year, and 5.5% sequentially. EBITDA increased by 15.5% to $14 million. Vent patient numbers grew modestly to 11,374, while sleep therapy patients saw an 11% sequential rise to 19,478, and sleep resupply orders grew by 9.7%. Gross margin slightly declined to 59.3%, attributed to a higher mix of sleep and related business, along with a lower proportion of revenue from ventilators. For Q4, VMD has guided revenue between $59.7 million and $60.9 million, implying a 4% sequential increase and an 18.9% year-over-year growth.
During the call, management discussed the potential reintroduction of the 75/25 rate and highlighted the benefits of GLP-1 drugs, which have become a tailwind for the company as patients undergo multifaceted treatment. The sleep therapy business now represents 17% of total revenue, with patients receiving resupply orders 2 to 2.5 times per year. The company’s M&A pipeline remains strong, and there is optimism about future deals, including potential acquisitions similar to the HMP deal.
Valuation-wise, VMD trades at a multiple of 7.3x EV/TTM EBITDA, which is close to 7x based on 2024 estimates. Given strong organic growth, a healthy balance sheet, and a promising M&A outlook, VMD appears undervalued, especially with a solid execution track record. The company remains a solid bet for long-term growth, and the current price presents an attractive opportunity for investors.
Viemed Healthcare, Inc. (VMD) is not on our list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 8 hedge fund portfolios held VMD at the end of the second quarter which was 10 in the previous quarter. While we acknowledge the risk and potential of VMD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than VMD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.