Canaccord ups Tactile Systems PT to $56

Canaccord Genuity raised its price target for Tactile Systems Technology (NASDAQ:TCMD) to $56 from $46 on the heels of a recent acquisition of IP. The stock closed at $51.37 on June 11.

Tactile is a medical device company focused on the treatment of chronic diseases in the home setting.

It recently signed a purchase agreement with Wright Therapy Products to acquire 31 issued and pending patents across eight patent families in the U.S. and EU, “helping to both better position Tactile for the future while also expanding the moat around the firm’s IP protection,” writes analyst Jason Mills.

While over the short term, the deal will serve to expand Tactile’s customer base, “we think investors should focus on the highly positive long-term ramifications of the acquisition, as Tactile effectively eliminated its current largest competitive threat and added newer IP to its portfolio that it can leverage in future Flexitouch iterations,” he added.

Mr. Mills said he continues to see Tactile as a solid, fundamentally
sound growth story in small-cap med-tech. “We think the current valuation undervalues the outstanding growth and gross margin profile of this unique direct-to-consumer business, targeting a large total addressable market, with unique technology, captained by a strong management team.”


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