Tactile Systems Likely To Expand Sales And Marketing Effort Says BTIG

While Tactile Systems Technology Inc TCMD has built a profitable platform with a strong sales and marketing channel and solid reimbursement relationships, the company is likely to deploy its recently acquired funds to boost sales and marketing for spurring further sales growth, BTIG’s Sean Lavin said in a report.

Analyst Lavin initiating coverage of Tactile Systems with a Buy rating and a price target of $18. While Tactile Systems’ product is not based on cutting-edge technology, the company has strengthened its position with a strong sales and support team.

“PCDs are relatively low-tech in the world of medical devices but serve a significant need for people with lymphedema…However, we believe Tactile has built a skilled salesforce over many years, and its channel into treating physicians, as well as into reimbursers, is well established and very hard to duplicate,” Lavin noted.

Investment Thesis

Tactile Systems generated revenue of $63 million in 2015, representing 32 percent y/y growth. The company’s growth trajectory continued in the first two quarters of 2016. The analyst believes that the share price “does not adequately reflect TCMD’s growth” and would increase as the company is able to exhibit sustained profitability.

Moreover, as the company’s profitability increases, it could become a potential acquisition target, Lavin commented.

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