Company Profile — Viemed ($VMD)
Steady compounder hiding in plain sight
Disclosure: I own shares in VMD. I am not a professional. Please do your own due diligence.
I usually don’t like to profile something right before they report quarterly results, but I had much of this completed and thought I would share it.
I recently pitched DRT.to at the SNN MCC conference in Toronto. I couldn’t decide what company to pitch so I actually started making the slide deck for three different companies before settling on DRT.to. But I didn’t want all my effort to go to waste, so I took my work on VMD, added to it and decided to reprofile the company.
Prior Profiles
I have owned VMD in different sizes since it was spun from Patient Home Monitoring way back in 2018. I have done more in-depth reviews of Viemed before.
Let’s hope I am better this with my timing for this go around as the share price has not done well since the last time I posted in-depth about VMD.
Both times have turned out to be less than stellar performance. In my defence the ttm EBITDA was 34.6 million and 43.1 million, or 0.85/share and 1.07/share and today it’s 55.2 million and 1.34/share. It’s expected to finish 2025 a bit higher on nominal and per share EBITDA terms. So I feel that I got the business right but the stock wrong.
Maybe EBITDA isn’t the right way to look at this, but it’s how I am.
Oh well, let’s try this one again.
Price: $6.60 USD
Shares: 41.1 million
Market Cap: 271 million USD
Enterprise Value: 284 million USD (after Lehan’s Medical Equipment acquisition)
Background
Viemed Healthcare, Inc. (“Viemed”) is a U.S.-based provider of in-home durable medical equipment (DME) and post-acute respiratory healthcare services focused on patients with chronic respiratory failure, COPD, and sleep-disordered breathing. The company operates under a “high-touch, high-tech” model — meaning it combines respiratory therapists’ in-person home visits with connected health technology, remote monitoring, and data-driven patient management to improve outcomes and reduce hospital readmissions.
The company’s core business is non-invasive ventilation (NIV) for severe COPD and neuromuscular patients, but over the past several years it has strategically diversified into complementary categories such as sleep therapy, oxygen therapy, and healthcare staffing. Viemed now services over 50,000 active patients across the United States and has built a national footprint spanning all 50 states.
The business is headquartered in Lafayette, Louisiana, and operates through a network of clinical locations supported by centralized billing, logistics, and compliance teams.
Company History
2006 – Viemed originated as Sleep Management LLC, founded by Casey Hoyt and Michael Moore in Lafayette, LA, to provide in-home respiratory services and sleep apnea testing.
2015 – Acquisition by Patient Home Monitoring (PHM): PHM (a Canadian healthcare roll-up) acquired Sleep Management for US $80.5 million (1.9× TTM revenue / 4.5× Adj. EBITDA). PHM later faced governance and insider-selling controversies, prompting a corporate breakup.
2017 – Spin-off and Listing: PHM separated into two independent companies:
Viemed Healthcare Inc. – focused on in-home ventilation and respiratory care (U.S. based).
Protech Home Medical (now Quipt Home Medical QIPT.TO) – broader DME provider.
2020 – COVID-19 Response: Viemed temporarily pivoted to provide ventilators and contact-tracing services, demonstrating operational agility. The post-COVID period saw normalization of revenue and patient flow as core COPD volumes recovered.
2021 – OIG Audit Resolved: The Office of Inspector General’s 2016-2017 audit on Medicare claims concluded without repayment obligation; the audit validated the medical necessity of NIV therapy.
2023 – Acquisition of Home Medical Products (HMP): Viemed acquired HMP Inc. for US $29 million (~1× revenue; 4.3× Adj. EBITDA), adding ~40 000 patients and diversifying service mix beyond ventilation.
2024 – HomeMed Joint Venture: Entered staffing JV with HomeMed to expand into medical staffing and remote clinical support.
2025 – Acquisition of Lehan’s Medical Equipment (July 1): US $26 million cash + up to US $2.2 million earnout; brought additional geography in the Midwest and broadened PAP/oxygen resupply base.
Today (2025): Viemed serves a large, growing patient population through five major service lines and continues to expand organically (~10–15% patient growth y/y) and via tuck-ins.
What do they do
The business is pretty straightforward. They get a prescription for a non-invasive ventilator (or other equipment) and they set it up at home for the patient. They make sure the patient is comfortable with the equipment and provide check-ins to monitor use and progress.
They purchase the machines from the manufacturers and then rent them out to patients typically through insurance. They bill the payors on a recurring monthly basis as long as the patient uses the machine. Many of their patients have severe COPD and are near end of life, so the average patient stay for ventilators is 17 months. This can lead to “bad debt” charge-offs that are higher than most businesses.
Treating the patient in home reduces them going in and out of the hospital. This not only frees up bedspace but it’s cheaper for the insurance and government payers. And most importantly, the patients usually prefer to be at home rather than a hospital.
Due to the complex needs of the patient, the high touch model differentiates them from other DME providers.
Segments
The business started out primarily renting vents, but has since diversified into other segments.
Ventilation ~54 % of revenue
Long-term rental of non-invasive ventilators (Philips Trilogy, ResMed, etc.) and related equipment for advanced COPD, ALS, neuromuscular disease.
High recurring revenue (~17-month average patient life); “uncapped” rental model.
Sleep Therapy (PAP / Sleep Testing) ~19 %
Home sleep testing, CPAP / BiPAP setup, supplies and recurring resupply programs.
Fastest-growing segment (+51 % y/y patient growth Q2 2025).
Oxygen Therapy ~10 %
Portable and stationary oxygen concentrators, cylinders, and supplies.
Stable, lower-margin category; complements vent + sleep patients.
Other / Staffing / Ancillary ~17 %
Healthcare staffing, percussion vests, cough-assist, nebulizers, resupply logistics, and other DME.
Staffing and behavioral support now meaningful contributors.
Business Drivers
Growth in active vent patients and expanding sleep therapy/resupply base. This is them entering new geographies which they have done methodically.
Diversifying revenue mix (sleep, oxygen, staffing) and payor base. On top of entering new geographies, they have diversified the business by adding additional services. Some organic and some inorganic.
Inorganic growth (M&A) via HMP (Jun 2023), HomeMed JV (Apr 2024), and Lehan’s (Jul 2025). They have executed transactions well.
Some business highlights
Q2’25: record results; net debt $0; credit facility availability ~$55M; net capex ~3% of revenue.
Patient counts (6/30/25): Vents 12,152 (+11.4% y/y, +2.9% q/q); PAP 26,260 (+51.4% y/y, +14.7% q/q); resupply 25,246 (+25.1% y/y, +10% q/q).
Updated FY’25 guidance (post-Lehan’s): revenue $271–277M; Adj. EBITDA $59–62M (~22% margin).
Mix shift vs 2019: In 2019, ventilation made up more than 80 % of total revenue, with sleep, oxygen, and other ancillary services accounting for the balance. Today, the mix is far more diversified — Vent 54 %, Sleep 19 %, Oxygen 10 %, and Other 17 % — reflecting Viemed’s deliberate expansion into sleep therapy, oxygen, and staffing. The payor mix has also broadened from being roughly two-thirds Medicare-driven in 2019 to a more balanced profile of Medicare 40 %, Medicare Advantage 22 %, Commercial 18 %, Medicaid/MCO 8 %, and Other 12 % as of mid-2025.
Recent Acquisitions
Lehan’s Medical Equipment (Illinois)
Closed July 1 2025.
~$25.7 m revenue / ~$7.4 m Adj. EBITDA.
US$26.0 million base price + ~US$2.2 million contingent payments.
Strategic rationale: expands Viemed’s geographic reach into Illinois / West Chicagoland; diversifies product mix (adding women’s health / maternal health) beyond core complex respiratory / sleep therapy business. HomeCare Magazine+1
Funding: combination of cash on hand and borrowings under existing credit facilities.~1.1x revenue and 3.5-3.8x EBITDA
HomeMed‑Majority Interest (East Alabama) (Alabama)
Closed April 1 2024.
Viemed acquired a majority ownership interest in the HME business of East Alabama Health (“HomeMed”) — financial terms not publicly disclosed.
Strategic rationale: partnership/joint-venture model with a hospital system (East Alabama Health) to integrate HME services within the healthcare system network; incremental annualized revenue expected to be ~US$4 million.
They recorded a 3.0 million cash outlay for HomeMed in the cash flow statement. This equates to 0.75x revenue.
Home Medical Products, Inc. (HMP) (Tennessee/AL/MS)
Announced April 2023; closed June 1 2023.
Approximate purchase price ~$31.75 million (adjusted for net working capital). Some disclosures also indicate ~$28 million in cash at closing.
Strategic rationale: HMP had ~45,000 active patients and operations in Tennessee, Alabama, Mississippi. The acquisition enhances Viemed’s geographic footprint in the Southeast, adds scale in HME / post-acute respiratory segment, and broadens product / payor mix.
1.13x revenue and 4.7x EBITDA
Balance Sheet
The balance sheet is strong. They currently have net debt of 12-13 (my estimate) after the acquisition of Lehan’s closed after end of Q2. They typically run at net cash until the find an acquisition. They will use debt and cash (and maybe a bit of shares to incentivize) in the purchase. The acquisitions are not typically dilutive.
Capex
The business is not capital light. They are required to purchase and maintain the equipment (at this point mostly non-invasive ventilators). They typically spend a
In 2024 they decided to participated in the Philips vent recall for their entire fleet. This concluded in Q2 2025. With VMD being opportunistic, they now have the newest vent fleet they have had in several years (potentially since the beginning of the business). Although this makes ttm FCF generation weaker than the go forward run rate for the business.
Q2 2024 Earnings Call (August 8, 2024)
In their earnings transcript, Viemed provides detailed remarks on how they are handling the Philips-ventilator issue:They stated: “We’ve entered into an agreement with Philips to buy back a large number of our affected vents. … By leveraging substantial volume purchase discounts with manufacturers of new ventilators, we can use the proceeds from the buyback to significantly reduce the average age of our … fleet without negative impacts on our overall cash flows and P&L.”
They noted: “We sold back approximately 15% of our fleet back already.”
They said: “Philips has been a good partner to work with on it. And thus far, it has been extremely positive and nothing, but good for the company and the patients at that point.”
They also referenced that the buyback helped capital redeployment: “The recent Philips recall of these older machines has presented a unique opportunity to replace these devices and alleviate the need for future servicing.”
So in sum: Viemed is treating the Philips recall as an operational opportunity (buy-back, fleet upgrade) while positioning it as beneficial for patients and business.
Q2 2025 Earnings (August 2025)
In a summary of their earnings, Viemed stated:“The financial benefits are clear as Philips bought back the vents at a price generally higher than our net book value, resulting in gains.”
That underscores that the buy-back arrangement with Philips provided an accounting gain / favourable financial outcome for Viemed on those units.
Having said all this, looking back is not the best way to try and understand VMD spend on capital equipment. For one the revenue mix is dramatically different today than the past. And the very large run in covid related revenue coupled with a quick runoff and slower ramp in the core biz has made things noisy for 2020-2022.
Share Structure & Ownership
~39.6 million basic shares outstanding (June 2025)
Diluted shares in Q2 2025: ~41.08 million (due to stock comp, options)
NCIB repurchase of up to 1,976,441 shares was completed.
The CEO and founder (Hoyt) still owns over 7% of the company.
The board collectively owns 1% (outside of the CEO).
The other co-founder still owns around 6% of the company.
Management & Compensation
CEO - Casey Hoyt
COO - Todd Zehnder
Compensation: mix of base + cash bonus + phantom shares + LTIP (options / RSUs).
Vesting schedules for phantom shares: typically in thirds annually.
Board
Board size: ~8 members.
5 are independent.
Board members have some skin in the game but independent ownership is modest (~1%).
Compensation: combines cash board fees + stock awards (likely in the ~$80–100k range in stock).
Chairs and committee leads are seasoned in capital markets / healthcare experience.
Risks (updated and persistent)
Reimbursement / regulatory risk
Cuts to ventilator reimbursement or changes in Medicare / MA rules remain a large overhang for this type of business.
Patient population risk / mortality / write-offs
Given the frailty of advanced COPD / ventilated patients, accounting for charge-offs / bad debt is critical. As the business has scaled and diversified, the bad debt write-offs has become less lumpy. Altough it is still something to watch for.
GLP-1 / disease-modifying trends
If metabolic treatments or other advances reduce progression of COPD / respiratory decline, demand could erode in long run. This is what I thought was holding back VMD in prior years.
Conversely, early data points show that if a patient gains access to GLP-1s they are likely to get multiple forms of treatment (including sleep machines or ventilators), so this may actually be pushing more patients toward VMD.
Inflation / cost pressure / supply chain
Escalating costs for devices, parts, labor could compress margins if reimbursement lags. The contracts typically have inflation adjustments in them, but there is a lag.
Acquisition integration risk
Though they have not stumbled with an acquisition yet, that may happen in the future. Even if the price paid is reasonable, there is always the fit for the business.
Management turnover / key person risk
If core leadership leaves, continuity could suffer. Particularly the CEO (Casey Hoyt) and COO (Todd Zehnder).
Prior audit / OIG legacy risk
There was an OIG investigation several years ago regarding improper billing that spooked everyone. Eventually VMD was cleared of any wrongdoing, but you never know if this happens again.
Dilution / capital allocation missteps
Poor investments, overpaying on acquisitions, or overspending R&D could hurt returns.
Macro / macro health policy risk
This administration is very different from the last one and you never know if there is some restructuring or policy shift that will affect VMD.
Valuation
Company raised FY’25 guide after closing Lehan’s (rev $271–277M; Adj. EBITDA $59–62M). We can layer current EV and run EV/EBITDA and FCF yield once we plug in today’s cap and net debt (currently ~$0).
Why This Opportunity Exists
I listed the risks above, but many of them are just a feature of this business. I think there are a few reasons for the opportunity here:
Given the current administration and the amount of changes, I think that VMD is put in the “wait and see” basket of many institutions. I believe they would be hard pressed to own a healthcare company when trailing returns for the sector are less than stellar. I shared this chart in a prior post.
The persistent worry of a reimbursement cut. This is always on overhang with the business. There really is no way around it. They are less exposed than in the past due to diversifying into different verticals and payors.
They took the opportunity of the Philips vent recall to refresh their vent fleet. This pulled forward much of the capex spend they had planned in the next 12-18 months. As such capex is elevated and FCF generation looks worse than it is. They have completed the conversion and moving forward the numbers will look better.
I mentioned that I am looking at the business mainly through the lens of EBITDA (and EBITDA per share). Though the business has performed on this metric, there is still a disconnect between EBITDA and CFFO. I do think there are reasonable explanations for this, but I recognize that CFFO (and FCF) needs to improve from here for me to make money on this.
There was general drag on the company that I think scare some institutions from investing.
2020 (+23.7%)
2021 (-32.73%) - Run off of covid revenue before core business continued to ramp due to covid lockdowns.
Early 2021 to mid 2022 - OIG investigation that was later completely overturned.
2022 (+44.83%) - much of this was after the OIG investigation had concluded.
2023 (+3.84%) - Potential impact from GLP-1 drugs being commercialized.
2024 (+2.17%) - Change healthcare cyber attack. This happened at the start of 2024 and it affected the company’s ability to collect their billed receivables and led to some disruptions in the industry.
2025 YTD (-15%) - Administration concerns. The changes both from DOGE and from the administration have the sector being unloved.
Closing Thoughts
Despite the challenges the business is performing well. The enterprise value has not moved much in the last 5 years despite EBITDA doubling.
Will this be the year that VMD gets a better bid? I don’t know, but it is trading at the lowest valuation in the last 5 years. The only time it was cheaper was for a blip during the initial covid sell-off.
In the meantime I am holding a solid business, that is growing, at a reasonable valuation and I’m aligned with insiders.
An updated guide in the next quarter or two could be the short term catalyst for the share price. The share price has been consolidating for quite some time.
Thanks for reading my work. If you have an opinion on VMD I would love to hear about it.
Dean
*long VMD at time of writing.
Why there is bad debt expense if the payer is the insurance company?