Viemed Healthcare, Inc. (VMD): A Bull Case Theory

Ricardo Pillai

Tue, May 13, 2025, 7:51 AM 3 min read

We came across a bullish thesis on Viemed Healthcare, Inc. (VMD) on Substack by Petty Cash. In this article, we will summarize the bulls’ thesis on VMD. Viemed Healthcare, Inc. (VMD)'s share was trading at $6.32 as of May 9^th. VMD’s trailing P/E was 22.57 according to Yahoo Finance.

A close-up of a medical technician wearing lab coat and a face mask preparing a portable oxygen concentrator for a patient.

VMD, trading at $6.42 with a market capitalization of $267 million, recently reported its Q1 results, which revealed a slight miss on revenue expectations but a positive surprise in EBITDA, beating forecasts. Despite the company’s strong performance, with EBITDA of $12.8 million and a 21.6% margin, the stock dropped by 11.7% due to concerns surrounding a proposed CMS (Centers for Medicare & Medicaid Services) ruling on ventilator use, which could significantly impact patient access, reimbursement, and utilization. The company’s revenue increased 17% year-over-year, reaching $59.1 million, driven by an uptick in ventilator patient counts, which grew by 13%, and a 7% sequential rise in PAP therapy patient numbers. However, the company’s sleep resupply patient count saw a 6% sequential decline, which is up by 21% compared to Q1 2024. VMD also raised its annual revenue guidance to a range of $256–265 million and EBITDA guidance to $55–58 million, excluding the upcoming acquisition of Lehan’s Medical Equipment, which is expected to close in Q3.

VMD’s vent business continues to make up a significant portion of revenue, although it experienced a slight decline of 3% sequentially in Q1. The company attributes this to a sales restructuring last year but remains optimistic about future growth in its sleep business, which saw a 7% sequential increase in Q1 and is expected to contribute to the company’s growth trajectory. The company is also moving forward with the acquisition of Lehan’s, a family-owned respiratory care and women’s health business based in Illinois. This acquisition will expand VMD’s footprint in the respiratory care market, providing opportunities for growth in Illinois and other regions where VMD already has a presence. The deal will also bring higher-margin resupply revenue into VMD’s portfolio, which should enhance overall profitability.

Despite the challenges posed by the CMS NCD decision, which could weigh on investor sentiment, VMD’s management remains confident in its ability to execute and adapt, as evidenced by the successful integration of Lehan’s. The company continues to prioritize operational efficiency, with significant capital expenditure going toward refreshing its ventilator fleet, which will help drive future revenue growth. With the stock trading at 5.2x EV/EBITDA, VMD is positioned to deliver solid long-term returns, especially as the company expands its market presence and benefits from improved product offerings and geographic reach. However, the potential impact of the CMS decision remains a key risk factor to monitor moving forward.