Is Electromed (NYSEMKT:ELMD) outlook still optimistic?

As many baby boomers are indifferent towards healthcare space, it makes sense to digest Electromed against current market trends. As expected, Electromed is starting to reaffirm its true potential as shareholders are becoming more and more confident in the future outlook. The returns on investing in Electromed and the market returns of the last few months appear uncorrelated. Unsteady basic indicators of the firm may also indicate signs of longer-term losses for Electromed shareholders. Electromed is scheduled to announce its earnings today. The next earnings report is expected on the 10th of November 2020.
Published over a year ago
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Reviewed by Gabriel Shpitalnik

Electromed's average rating is Buy from 1 analysts. Do analysts base this consensus on technical analyses? We know that typical technical analysis utilizes price momentum, patterns, and trends looking at historical prices. It aims to identify signals based on Electromed market sentiment investors' perception of the future value of Electromed. Let us look at a few aspects of Electromed technical analysis. The company has Profit Margin (PM) of 11.5 %, which can signify that it executes well on its competitive strategies and has good control over its expenditures. This is very large. Similarly, it shows Operating Margin (OM) of 15.97 %, which suggests for every 100 dollars of sales, it generated a net operating income of 0.16.
Using predictive technical analysis, we can analyze different prices and returns patterns and diagnose historical swings to determine the real value of Electromed. In general, sophisticated investors focus on analyzing Electromed stock price patterns and their correlations with different microeconomic environment and drivers. They apply predictive analytics to build Electromed's daily price indicators and compare them against related drivers such as momentum indicators and various other types of predictive indicators. Using this methodology combined with a more conventional technical analysis and fundamental analysis, we attempt to find the most accurate representation of Electromed's intrinsic value. In addition to deriving basic predictive indicators for Electromed, many experienced traders also check how macroeconomic factors affect Electromed price patterns. Please read more on our technical analysis page or use our predictive modules below to complement your research.
Sophisticated investors, who have witnessed many market ups and downs, anticipate that the market will even out over time. This tendency of Electromed's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Electromed. Your research has to be compared to or analyzed against Electromed's peers to derive any actionable benefits. When done correctly, Electromed's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Electromed.

How important is Electromed's Liquidity

Electromed financial leverage refers to using borrowed capital as a funding source to finance Electromed ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Electromed financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Electromed's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Electromed's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Electromed's total debt and its cash.

Electromed Gross Profit

Electromed Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Electromed previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Electromed Gross Profit growth over the last 10 years. Please check Electromed's gross profit and other fundamental indicators for more details.

Closer look at Electromed Semi Deviation

Electromed has current Semi Deviation of 3.77. Semi-deviation provides a good measure of downside risk for a equity or a portfolio. It is similar to standard deviation, but it only looks at periods where the returns are less than the target or average level.
Semi-deviation is the square root of semi-variance. Semi-variance is calculated by averaging the deviations of returns that have a result that is less than the mean.
Semi Deviation 
=  
SQRT(SV) 
 = 
3.77
SQRT = Square root notation
SV =   Electromed semi variance of returns over selected period
Let's now compare Electromed Semi Deviation to its closest peers:
ELMD
ESTA
ESMC
EDAP
ELMD3.77
ESTA3.65
ESMC9.07
EDAP2.49

Will Electromed growth be reliable after the surge?

The variance is down to 14.77 as of today. Electromed shows above-average downside volatility for the selected time horizon. We advise investors to inspect Electromed further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Electromed future alpha.

Our Takeaway on Electromed Investment

Although many of the other players under the medical devices industry are still a bit expensive, Electromed may offer a potential longer-term growth to shareholders. To summarize, as of the 25th of August 2020, our research shows that Electromed is a rather not too volatile investment opportunity with a close to average probability of distress in the next two years. From a slightly different view, the entity currently appears to be undervalued. However, our up-to-date 30 days buy-hold-sell recommendation on the firm is Strong Sell.

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Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Electromed. Please refer to our Terms of Use for any information regarding our disclosure principles.

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