Shares of Electromed, Inc. (ELMD) have been strong performers lately, with the stock up 47.3% over the past month. The stock hit a new 52-week high of $40 in the previous session. Electromed has gained 29.5% since the start of the year compared to the -5.2% gain for the Zacks Medical sector and the -14.9% return for the Zacks Medical - Instruments industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 12, 2026, Electromed reported EPS of $0.35 versus consensus estimate of $0.26 while it beat the consensus revenue estimate by 4.35%.
For the current fiscal year, Electromed is expected to post earnings of $1.2 per share on $74 in revenues. This represents a 41.18% change in EPS on a 15.63% change in revenues. For the next fiscal year, the company is expected to earn $1.52 per share on $84.2 in revenues. This represents a year-over-year change of 26.67% and 13.78%, respectively.
Valuation Metrics
Electromed may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Electromed has a Value Score of D. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 31.4X current fiscal year EPS estimates, which is a premium to the peer industry average of 22X. On a trailing cash flow basis, the stock currently trades at 35.5X versus its peer group's average of 15.4X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this is even more important than the company's VGM Score. Fortunately, Electromed currently has a Zacks Rank of #2 (Buy) thanks to a solid earnings estimate revision trend.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Electromed passes the test. Thus, it seems as though Electromed shares could have a bit more room to run in the near term.
How Does ELMD Stack Up to the Competition?
Shares of ELMD have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Integra LifeSciences Holdings Corporation (IART). IART has a Zacks Rank of #2 (Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of C.
Earnings were strong last quarter. Integra LifeSciences Holdings Corporation beat our consensus estimate by 31.71%, and for the current fiscal year, IART is expected to post earnings of $2.42 per share on revenue of $1.67 billion.
Shares of Integra LifeSciences Holdings Corporation have gained 46.5% over the past month, and currently trade at a forward P/E of 6.64X and a P/CF of 3.8X.
The Medical - Instruments industry may rank in the bottom 61% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for ELMD and IART, even beyond their own solid fundamental situation.
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Electromed, Inc. (ELMD): Free Stock Analysis Report
Integra LifeSciences Holdings Corporation (IART): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).