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Viemed Sees Gains in Respiratory Care
10/24/2019 5:00 am EST
Viemed (VMD), through its wholly owned subsidiaries Sleep Management and Home Sleep, is a participating Medicare durable medical equipment supplier that provides post-acute respiratory care services in the U.S., notes Ryan Irvine, the CEO of KeyStone Financial and a contributing editor to Internet Wealth Builder.
In layman's terms, the company places respiratory therapists inside the home to treat patients with very sick lungs. Many of these patients are unfortunately at the end stage of their life, at a time when they are most likely to visit the hospital. The service prevents these hospital readmissions from occurring.
The primary disease treated is COPD or chronic obstructive pulmonary disease. With almost 25 million Americans reporting that they have been diagnosed with COPD, it is the country's third largest killer behind cancer and congestive heart failure.
The company provides a solution for people who suffer from this debilitating disease. Viemed uses non-invasive ventilators (NIV) which allows caregivers to ventilate the patient with a mask versus forcing them to be in the bed intubated. The quality of life is better, and the healthcare costs decrease.
As physicians and care givers become aware of the clinical efficacy of the therapy, there is potential that the referrals from them could snowball.
Additional products offered by Viemed, including vests, are starting to contribute to revenue. With its infrastructure in place (respiratory therapists and registered nurses), it appears the company can provide more in-house services to the same client, helping to grow its brand as a one-stop service company.
We expect acceleration in EBITDA growth rates in 2020, which could lead to a significant increase in our fair value estimate if EBITDA margins return to higher levels over the next two quarters.We reiterate our "Speculative Buy" recommendation. We see long-term value in the current range with a 2-5 year holding period outlook.
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