Tactile Systems Technology (NASDAQ: TCMD) has reported its first quarter 2024 financial results, which included key data. The company’s revenue for the period was US$61.1m, an increase of 3.8% from the same quarter in 2023. However, Tactile Systems Technology also reported a net loss of US$2.21m, which was a widening of 17% from the previous year. This resulted in a loss per share of US$0.093, compared to US$0.089 in the first quarter of 2023.
Despite the mixed financial results, Tactile Systems Technology exceeded revenue expectations by 3.1%. However, they fell short on earnings per share (EPS) estimates by 16%. Looking forward, the company is forecasting a 12% annual revenue growth rate over the next three years, outperforming the Medical Equipment industry in the US, which is expected to grow at an annual rate of 8.1%.
The American Medical Equipment industry has shown positive performance, with Tactile Systems Technology’s shares rising by 4.9% in the past week. However, it is important to consider potential risks associated with investing in the company. Two warning signs have been identified that investors should be aware of.
One risk factor is that Tactile Systems Technology’s net loss widened from last year despite revenue increasing slightly above expectations. Additionally, although they are forecasting strong revenue growth over the next three years, this may not translate into profitability if their operating expenses continue to rise at an unsustainable rate or if they encounter unexpected challenges in bringing new products to market or expanding their customer base.
Another risk factor is that while Tactile Systems Technology’s shares have risen recently due to positive industry trends and increased demand for medical equipment products during the COVID-19 pandemic, this momentum may not continue as economic conditions improve and investors shift their focus towards other sectors or industries with higher growth potential or lower volatility risks.
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