This analyst just raised his price target on Electromed

Electromed (Electromed Stock Quote, Chart, News, Analysts, Financials NYSE:ELMD) posted better-than-expected fiscal second-quarter results, prompting Roth analyst Kyle Bauser to reiterate his “Buy” rating and raise his 12-month price target to $38.00 from $36.00 in a Feb. 11 report.

Electromed, headquartered in New Prague, Minnesota and founded in 1992, manufactures, markets and sells airway clearance therapy products designed to treat patients with compromised pulmonary function, including its SmartVest system for high frequency chest wall oscillation.

Bauser said the quarter was “largely driven by strong performance in the company’s core homecare business,” adding that Electromed “continues to generate double-digit revenue growth with operating leverage,” a trend he expects to continue in coming quarters.

In Q2/FY26, revenue rose 16.3% year-over-year to $18.9-million, ahead of consensus of $18.0-million. Operating income increased 42.2% to a record $3.6-million, versus consensus of $2.8-million. Adjusted EBITDA margin was 24.0%, above Bauser’s 22.4% estimate, while net income reached $2.8-million, or $0.32 per diluted share, compared with consensus of $0.26.

Homecare revenue grew 18.4% year-over-year, supported by an expanded sales force and higher net revenue per representative, particularly in the Medicare channel. Distributor sales increased 12.1% on stronger demand from home medical equipment partners. The hospital channel declined 9.4%, reflecting prioritization of homecare shipments and lumpy capital order timing, though management expects improvement in the second half of fiscal 2026.

Electromed averaged 58 direct field sales representatives across 61 territories in the quarter, generating annualized homecare revenue per weighted average rep of $1.2-million, above its $1.0-million to $1.1-million target range. The company executed 25 payer contracts in the first half of FY26, adding 2.9 million covered lives to more than 270 million currently under contract.

Bauser said the company’s “Triple Down on Bronchiectasis” education campaign continues to build awareness in an underserved market of roughly 923,000 diagnosed U.S. patients, of whom only 16% currently use HFCWO therapy. He also highlighted encouraging industry data, including strong early sales of a newly launched bronchiectasis drug, which he believes could expand overall awareness and demand for airway clearance therapies.

Following the Q2 outperformance, Bauser modestly increased his forward estimates. He now expects Electromed to generate $16.1-million in Adjusted EBITDA on revenue of $72.3-million in fiscal 2026, improving to $19.3-million in Adjusted EBITDA on revenue of $80.7-million in fiscal 2027.

-30-