Viemed Healthcare: Regular As She Goes (NASDAQ:VMD)

Intro

We wrote about Viemed Healthcare, Inc. (NASDAQ:VMD) in December of 2021 after we said that the inventory was within the preliminary innings of a brand new bullish development. Although we have been a couple of months early in our bullish name (Shares truly bottomed in March of 2022), buyers nonetheless would have realized a 67%+ return on their funding up to now in the event that they ran with our purchase name. The query now could be whether or not Viemed’s sturdy momentum can proceed going ahead (Blistering 12-month return of 121%+ up to now).

If we pull up an intermediate chart of Viemed Healthcare, we see that the intermediate development has truly strengthened in latest periods (As seen via the sustained rise within the ADX trend-following indicator). Suffice it to say, given VMD inventory’s highly effective intermediate development in movement, there’s each risk that shares rally again as much as overhead resistance approaching $11 a share (The present share value is $9.05 per share). A mistake buyers invariably make with their investments is taking income too early. Yes, Viemed’s valuation multiples have clearly elevated considerably because of this newest transfer however it isn’t Viemed’s fault that the market continues to like this inventory. Therefore, we advocate lengthy place holders ought to stay lengthy VMD the place one thing like a trailing cease can be utilized to guard paper income.

Share Price Action Discounts Everything

Remember, Viemed’s share-price motion on the technical chart consists of each piece of knowledge, be it elementary or in any other case that’s presently identified about this firm. This might bemuse some buyers, particularly given the truth that shares now commerce with ahead GAAP earnings a number of of virtually 50 and consensus expects progress to taper off subsequent yr (Only 6%+ top-line progress anticipated in fiscal 2024) as we see beneath. This is the place the discrepancy lies (Forward-looking progress charges) in that consensus believes there shall be a cyclical-type impact on the corporate’s progress path. The market, nevertheless, stays oblivious to this cyclicality taking part in itself out as shares proceed to make new highs each week.

More Favorable Trading Conditions

In truth, the CEO pointed to this on the latest third-quarter earnings name when he aimed to guarantee buyers {that a} potential financial slowdown (almost definitely fueled by excessive inflation) shouldn’t adversely have an effect on Viemed’s operations to any important diploma. What he was getting at right here is that labor markets have vastly improved over latest quarters (More pushed gross sales workers) and upward stress (because of above-average inflation) continues to extend reimbursement charges over time. Suffice it to say, these developments tie in very properly with how affected person numbers have been rising for Viemed.

Veterans Administration Potential

Furthermore, the market may even see the continuing engagement with the Veterans Administration as one other catalyst for sustained progress for the corporate. Viemed’s Engage platform on this endeavor is for use to trace sufferers affected by Chronic obstructive pulmonary illness (COPD). Promising outcomes from the examine may simply be the set off to roll out this initiative on a a lot bigger nationwide foundation.

M&A & Ruling Win

Furthermore and solely just lately, Viemed got here out on prime with respect to the overruling of all remaining OIG claims regarding Medicare necessities. Viemed mainly from day one refuted OIG claims stating that their findings have been far too basic in nature and lacked particular person instances and corresponding diagnoses. There is little question that the favorable determination additional enhanced Viemed’s fame and will certainly add extra weight to the corporate’s services and products when pitching to physicians and payors alike going ahead.

For diversification functions, nevertheless, and to carry extra worth to the desk within the firm, normally, administration is aware of it must begin allocating capital a lot better and at a a lot sooner clip than what we’ve seen already. Up to now, what we’ve mainly seen is share buybacks however it was encouraging to see administration investing $2 million in ModoHealth just lately, which was an funding that was nicely earmarked for fairly a while now. Management has said that Viemed has a variety of M&A alternatives to select from, so we count on extra accelerated exercise in upcoming quarters.

Conclusion

Therefore, to sum up, though Viemed’s valuation could also be getting lofty from the incessant rally we’ve seen over the previous 12 months, share-price motion is demonstrating that there’s extra room left on this current rally. Let’s see what This fall earnings carry initially of March. We sit up for continued protection.