TCMD Stock- Tactile Systems (TCMD) Hits New Highs: What Investors Need to Know
TCMD Stock– Shares of Tactile Systems Technology (TCMD) have been on an impressive upward trajectory, rising 31% in the past month alone. The stock recently hit a fresh 52-week high of $19.55, marking a significant milestone for the company. Tactile Systems Technology has gained 32.3% since the beginning of the year, far outpacing the Zacks Medical sector’s modest 1% increase and the 5.3% rise of the Zacks Medical – Instruments industry.
Why Is TCMD Outperforming the Market?
One of the key drivers behind Tactile Systems Technology’s strong performance is its consistent track record of positive earnings surprises. Over the last four quarters, the company has consistently exceeded earnings expectations, and its latest report on November 4, 2024 continued that trend. Tactile posted earnings per share (EPS) of $0.24, surpassing the consensus estimate of $0.18.
Looking ahead, analysts are forecasting that Tactile Systems Technology will report earnings of $0.65 per share for the current fiscal year, with revenues expected to reach $292.84 million. While this reflects a -48.03% year-over-year change in EPS, the company is expected to post stronger growth in the following year, with EPS rising to $0.86 per share and revenues increasing by 10.08% to $322.36 million.
Assessing the Stock’s Valuation Metrics
Despite the strong recent performance, investors must assess whether Tactile Systems Technology’s stock has become overvalued at its current levels. A key tool for evaluating this is the Zacks Style Scores, which help investors evaluate stocks based on Value, Growth, and Momentum. Tactile Systems Technology currently holds a Value Score of A, signaling its strong value relative to its peers. However, its Growth and Momentum Scores are rated C, resulting in a VGM Score of B.
When it comes to valuation, TCMD currently trades at 28.9 times its projected EPS for the current fiscal year, which is slightly above the industry average of 28.8X. On a trailing cash flow basis, the stock trades at 12.3X, which is more attractive compared to the peer group average of 17.3X. While these metrics suggest the stock is not significantly overvalued, it does not necessarily place Tactile Systems Technology in the top tier from a value perspective.
Zacks Rank and Future Outlook
Another important indicator for investors is the Zacks Rank, which reflects analysts’ sentiment regarding a stock’s future performance. Tactile Systems Technology currently holds a Zacks Rank of #2 (Buy), driven by favorable earnings estimate revisions from analysts covering the stock.
Zacks recommends that investors focus on stocks with a Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B. Given that Tactile Systems Technology meets these criteria, the stock appears to be in a strong position for future growth.
How Does Tactile Systems Technology Compare to Its Competitors?
While Tactile Systems Technology has been performing well, it’s important to evaluate how it stacks up against its peers in the medical instruments space. Fresenius Medical Care AG & Co. KGaA (FMS) is one such competitor that stands out. Like TCMD, Fresenius has a Zacks Rank of #2 (Buy), indicating positive sentiment from analysts. The company also has strong Value (A), Growth (C), and Momentum (C) scores, making it a solid choice in the same industry.
Fresenius Medical Care recently reported a 7.14% earnings surprise in its last quarter, and for the current fiscal year, the company is expected to post earnings of $1.87 per share on $21.02 billion in revenue. Fresenius Medical Care shares have gained 8.2% over the past month and are currently trading at a forward P/E ratio of 14.76X and a P/CF ratio of 4.88X.
Solid Industry Outlook for Both TCMD and FMS
The Medical – Instruments industry, which includes both Tactile Systems Technology and Fresenius Medical Care, is performing well overall. The industry ranks in the top 25% of all industries tracked by Zacks, meaning both TCMD and FMS are benefiting from favorable sector trends.
The tailwinds for the industry suggest that both companies could continue to thrive even beyond their own solid fundamentals. With increasing demand for medical devices, innovations in healthcare technology, and a positive regulatory environment, the outlook for companies in this space remains optimistic.
As always, it’s important to do thorough research or consult a financial professional before making any investment decisions.
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