Viemed Healthcare: Turning Bullish Once More On Growing Ventilator Patient Numbers

Core Viewpoint - Viemed Healthcare is upgraded to a 'Buy' rating following a strong Q2 earnings report and positive technical indicators, despite previous concerns about growth and market trends [2][3]. Technical Analysis - A bullish crossover of the MACD indicator suggests a potential upward trend for Viemed's stock, indicating favorable conditions for price appreciation [3]. - The stock has recently broken above a bearish trend line, and while it faces resistance at the 200-day moving average of approximately $7.78, there is optimism for overcoming this barrier [6]. - Strong buying volume has been observed despite a 27$10, indicating potential for a price rebound [6][7]. Encouraging Q2 Trends - Viemed reported record revenue of $55 million in Q2, reflecting a 27% rolling quarter growth and an increase in active ventilator patients by 4.4% [8]. - The restructuring of the sales team has led to improved performance and increased reach to patients, suggesting a scalable growth model for the company's ventilator business [9]. - The introduction of GLP1 drugs has not negatively impacted Viemed's sleep business; instead, it has heightened awareness and sustained growth in CPAP and sleep product lines [10]. Strategic Opportunities - The recall of Philips' ventilators presents a unique opportunity for Viemed to upgrade its fleet through a buy-back agreement, allowing for the replacement of older units without negatively impacting cash flows [11]. - The company is leveraging volume purchase discounts to enhance its inventory while reducing servicing costs associated with older machines [11]. Valuation Perspective - Viemed's trailing GAAP multiple of nearly 32 may seem high, but its sales and book multiples are significantly below 5-year averages, indicating attractive valuation for potential earnings growth [12]. - The company's trailing price-to-sales ratio is 1.37, which is 45.9% lower than its 5-year average, and the price-to-book ratio is 2.38, 40.3% below its historical average [12]. Conclusion - Continued investments in technology, particularly the Engage platform, alongside positive technical indicators and growing patient counts, suggest a favorable outlook for Viemed's share price in the near term [13].