Shares of Viemed Healthcare, a company with a market capitalization of almost $355 million that provides in-home respiratory support, surged almost 16% in after-hours trading on Wednesday, November 6. The gains were attributable to third-quarter financial results, which featured record- and guidance-beating revenue.
Details
In after-hours trading on Wednesday, Viemed stock spiked almost 16% to $10.60 per share, a level it had not seen in a regular session in about a year and a half. It had ended the day on Wednesday up 3.9% at $9.14 per share. Since the beginning of the year, it has gained more than 16%.
On Wednesday evening, Viemed released financial results for the third quarter of 2024 (ended September 30). Revenue grew 17.4% year over year to a record $58 million, beating the company’s August-issued guidance of $56.5-57.7 million. For the fourth quarter, Viemed expects a top line of $59.7-60.9 million.
Net income was up 33% in the third quarter at $3.9 million, or $0.10 per share.
Context
Viemed Healthcare provides in-home respiratory support for people with breathing difficulties. The company believes demand for such services is potentially enormous, with an estimated 1.25 million Americans suffering from chronic obstructive pulmonary disease in need of respiratory support.
Viemed’s business is also being boosted by the rising popularity of GLP-1 weight-loss drugs, the company noted during an August earnings call with analysts and investors. More than 90% of the weight-loss drug market is currently controlled by Wegovy by Novo Nordisk of Denmark and Zepbound by Eli Lilly of the U.S. As these drugs have become more popular, more people have started addressing other health issues, Viemed noted.
Excess weight often leads to sleep apnea — temporary breathing pauses during sleep — which can sometimes be alleviated with respiratory support. In the third quarter, the number of patients undergoing sleep therapy rose 11% to 19,500, according to Viemed.
Analyst recommendations
According to MarketWatch, only three analysts cover Viemed, but all of them rate it a “buy.” Their average target price of $12.27 per share suggests 34% upside versus the last closing price.
