Shares of Tactile Systems Technology (NASDAQ:) have sank 19% over the past three months, but are up 34.7% in the past year.

Stocks could see a surge in value soon due to some catalysts. This is why I believe this company should be considered a bull.

Tactile Medical, located in Minneapolis, Minnesota is a manufacturer of home-therapy devices for those suffering from chronic swelling.

The devices have been used to treat patients suffering from chronic venous and lymphedema in the United States.

A national network of clinicians and professionals provides the company with care services. (See TCMD stock charts on TipRanks)

From the Second Quarter Report

Despite headwinds due to restrictions adopted by healthcare facilities to prevent the spread of the COVID-19 virus, Tactile Systems increased its Q2 revenue by 45% year-over-year to $51.1 million.

Tactile Systems made a net profit $1.3 million or $0.07 in diluted earnings. This is an improvement from $13.9million, $0.72 per diluted shares, that was recorded for the quarter before.

As of June 30, 2021 the balance sheet contained $49 million in cash, cash equivalents and total debt.

Better Outlook Ahead

An increasing number of healthcare organizations and clinics will ease restrictions going forward, allowing Tactile Systems to increase revenues as patient throughputs get more and more similar to pre-pandemic levels.

Tactile Systems will also work to make its salespeople more efficient and get other health professionals to recommend Tactile Systems products.

Tactile Systems has also acquired a device for respiratory therapy from International Biophysics Corporation, a privately owned manufacturer. This acquisition was made earlier in September.

A wearable, battery-powered vest is used to treat patients suffering from chronic lung conditions such as cystic fibrosis or other neuromuscular disorders.

It expects to generate total revenue between $216.3million and $224.5million in fiscal year 2021. This is an increase of 16% to 20% over the previous year.

Wall Street’s Take

In the past three months, two Wall Street analysts have issued a 12-month price target for Tactile Systems Technology. Tactile Systems Technology is currently trading at $71.50. This implies a potential upside of 61.8%. Two Buys are the basis of the consensus analyst rating for Tactile Systems Technology, which is a Moderate buy rating.

Summary

This company is well-positioned to post higher revenues for much better margins, potentially driving up the share price.

Disclosure: Alberto Abaterusso didn’t hold any position at the time this article was published.

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