Is Quipt Home Medical stock a buy?

Quipt Home Medical’s (Quipt Home Medical Stock Quote, Chart, News, Analysts, Financials TSX:QIPT) fiscal Q3 2025 results were sequentially stable but slightly lower than last year’s quarterly levels, Leede Financial analyst Douglas Loe said Aug. 12. He maintained a “Buy” rating and US$4.50 target.

The Kentucky-based respiratory medical equipment distributor was impacted by the discontinuation of Medicare 75/25 funding for the durable medical equipment sector, but managed to stabilize performance in the quarter.

“The firm already guided capital markets to expect an annual sequential revenue decline of (US$8.0M) that our model still projects, but with recent acquisitions of the equipment distribution division of Ballad Health (private) & the new joint venture with MI-based Hart Medical Equipment (private) poised to offset revenue softness that Medicare 75/25 discontinuation confers,” Loe said.

He said Quipt’s new joint venture with regional peer Hart Medical could be strategically valuable, particularly if Hart’s EBITDA margins improve as much as Quipt expects by the first half of fiscal 2026.

“Starting with the newly-announced JV and working back to FQ325 financial data separately reported (Aug. 12), the mostly MI-based durable medical equipment private peer into which Quipt just acquired a 60% ownership stake was valued at US$17M-to-US$18M (we assume the range is based on pending valuation of existing inventory or a potential milestone payment based on Hart’s imminent financial data),” he said. That values Quipt’s stake at about 0.5x T12M revenue or 4.2x T12M EBITDA, a premium compared with Quipt’s own 2.8x F2026 consensus EBITDA multiple.

The analyst said that if Hart’s equipment distribution operations reach Quipt’s average EBITDA margin of about 23% (which he calculates at 23.9% over the last seven quarters), then on a margin-adjusted basis, the deal could be valued at 2.1x annualized target EBITDA. That would be a much more attractive multiple if Hart achieves Quipt’s average margin by the first half of fiscal 2026, as Quipt projects

“Quipt believes that most of the EBITDA margin expansion it is projecting is achievable on revised cost structure for the partnered organization,” Loe said. “Quipt has a long track record of expeditiously equilibrating EBITDA margin post-acquisition at its corporate average within a quarter of acquisition & so based on Quipt’s acquisition history, this timeline to EBITDA margin expansion seems reasonable to us.”

Loe said Quipt’s revenue and EBITDA should benefit proportionally from Hart’s trailing 12-month results, with margins improving as costs align with Quipt’s average.

“For modelling purposes, we will assume that Hart’s annual trailing revenue data is sustainable at that level throughout our Quipt forecast period, starting in FQ126, & that its current annualized EBITDA margin can sequentially & linearly grow from its current level of 12% up to 23% by FQ326,” Loe said. “As guided by Quipt in its Hart acquisition press release, we will adjust for Quipt’s proportionate ownership stake in Hart by allocating distinct net income from noncontrolling interests at the net income line of our model.”

Loe said that Quipt should do $54.9-million in Adjusted EBITDA on revenue of $237.5-million in fiscal 2025. He thinks those numbers will improve to $64.7-million on revenue of $308.8-million in fiscal 2026.

Loe described Quipt’s Q3 2025 results as “essentially flat sequentially” on key profitability metrics, with slight improvement that left his valuation and thesis unchanged. Year-over-year declines were in line with expectations given industry-wide funding pressures.

He continues to base his valuation on the fiscal 2026 EBITDA forecast but has trimmed the EV/EBITDA multiple to 4.5x from 5x, citing anticipated margin compression in early fiscal 2026.

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