Tactile Systems surges to 52-week high on earnings beat
Medical device company tops estimates with 21% revenue growth and expands digital capabilities through LymphaTech acquisition
Tactile Systems Technology shares surged to a 52-week high on Tuesday after the medical device company reported fourth-quarter earnings that comfortably exceeded Wall Street expectations and announced a strategic acquisition to expand its digital capabilities.
The Minneapolis-based company, which specializes in treatments for lymphatic and respiratory diseases, reported total revenue of $103.6 million for the quarter ended December 31, representing a 21% year-over-year increase and topping analyst estimates of approximately $93.8 million. Net income reached $10.6 million, or $0.46 per diluted share, compared with the consensus projection of $0.44.
The stock closed 6% higher at $28.05, marking its highest level since November 2023, according to market data. The shares have gained nearly 50% over the past six months as investors bet on the company's positioning in the growing lymphedema treatment market, which is projected to expand to $1.03-$1.09 billion in 2026, driven by increasing cancer survivorship and favorable reimbursement changes.
Beyond the earnings beat, Tactile announced it had acquired LymphaTech for $6.8 million in an upfront cash payment, with potential additional consideration based on milestone achievements. LymphaTech provides a digital 3D scanning platform for detecting and monitoring chronic swelling, technology that Chief Executive Officer Sheri Dodd said would transform the company into "a comprehensive, integrated solutions leader for lymphatic dysfunction."
"In 2025, we executed with discipline against our core growth strategies, delivering double-digit revenue growth, expanding gross margin and adjusted EBITDA, and generating strong cash flow, while continuing to strategically invest in people and workflow-related processes to strengthen our business for scale," Dodd stated in the earnings release.
The quarterly performance capped a strong full year for Tactile, with 2025 revenue increasing 12% to $329.5 million and net income rising to $19.1 million, or $0.82 per share. The company ended the year with $83.4 million in cash and repaid the full $26.3 million balance on its term loan while simultaneously repurchasing $26.5 million of stock at an average price of $12.36 per share.
For 2026, Tactile provided guidance calling for revenue between $357 million and $365 million, representing 8% to 11% growth, and adjusted EBITDA of $49 million to $51 million. The outlook reflects confidence in continued momentum in the lymphedema business alongside "increasing depth and breadth of collaboration with our DME partners in our respiratory business," according to Dodd.
Analysts responded positively to the results, with BTIG maintaining its "Buy" rating and raising its price target from $36 to $38. The average analyst price target now stands at $29.75, according to consensus data, suggesting further upside from current levels. Of four analysts covering the stock, 50% rate it a "Strong Buy," 25% a "Buy," and 25% a "Hold."
The strong institutional ownership of 102.7% indicates heavy demand among institutional investors, who have been positioning the stock as a play on the aging population and increasing prevalence of chronic conditions requiring home-based treatment solutions.
Gross margin expansion to 78% in the fourth quarter, up from 75% a year earlier, demonstrates the company's ability to scale profitably. Adjusted EBITDA of $22.9 million for the quarter marked a significant improvement from $16.2 million in the prior-year period.
Looking ahead, investors will be watching the integration of LymphaTech's digital monitoring capabilities and whether the technology can drive adoption among clinicians and compression garment manufacturers. The co-founders of LymphaTech have joined Tactile Medical to lead commercial adoption and research activities, indicating the acquisition's strategic importance to the company's long-term vision.