Viemed Healthcare Q1 2026 Update – VMD
Stronger fundamentals, weaker stock — a familiar pattern
Disclosure: I own shares in VMD. I am not a professional. Please do your own due diligence.
Price: $8.58
MC: 347 million USD
EV: 350 million USD
1 year performance: +15%
Viemed Healthcare reported last night and held a call this morning. Results were ahead of my expectations and the stock was down 11.8% at time of writing.
all numbers in USD unless stated otherwise
Quarter Recap
Q1 2026 Financials
Revenue: 75.4 million vs 59.1 million
Gross Profit: 42.8 million vs 33.3 million
Gross Margin: 56.8% vs 56.3%
Adjusted EBITDA: 14.3 million vs 12.8 million
Adjusted EBITDA Margin: 19.0% vs 21.6%
Net capex: 5.5 million vs 8.5 million
Cash: 9.8 million vs 10.2 million
Long‑term debt: 8.3 million vs 11.3 million
Share repurchases: 150,000 shares at 9.29 per share
Segment Breakdown & KPIs
Ventilator rentals: 35.4 million vs 32.2 million
Other home medical equipment rentals: 16.2 million vs 13.0 million
Equipment and supply sales: 17.5 million vs 7.5 million
Ventilator patient count: 12,089 vs 11,850
PAP therapy patient count: 35,938 vs 22,900
Sleep resupply patient count: 33,661 vs 22,900
Service revenue: 6,368 vs 6,489
Maternal health new patients: 4,000
Capital Plan (Quarter Activity)
Total capex: 6.7 million vs 15.5 million
Updated full‑year net capex outlook: 9% to 10.5% of revenue (prior 10% to 11.5%)
Drivers of lower capital intensity: mix shift toward sleep resupply and maternal health
Ventilation remains capital intensive but a smaller share of total revenue
Conference Call Notes
Guidance drivers
All major product lines have potential to push results toward the high end of guidance
Ventilator new patient starts exceeding internal expectations
Compliance improvements expected to support longer patient retention
Maternal health scaling faster than expected and likely to contribute to outperformance
Sleep continues to outperform prior expectations
Maternal health scaling
Integration of the acquired business has been smooth and accretive since day one
Nearly 4,000 new maternal health patients serviced in markets where the acquired business had no prior presence
Expansion into new geographies underway
Sales capacity is not a constraint
Back office and fulfillment capacity are the primary limiters
Digital marketing is a key driver of growth
Ventilation operational dynamics
New patient startup momentum building faster and stronger than expected
Referral sources increasingly comfortable with updated NCD criteria
Documentation processes maturing
March ventilator setups: 759 vs 692
Higher turnover in early‑stage NCD patients due to compliance checkpoints
Compliance among active ventilator patients improved nearly 20% since NCD implementation
Regulatory environment
Competitive bidding categories do not include Viemed’s current products
No expected material impact from competitive bidding
CMS enrollment moratorium has no impact on operations
Moratorium restricts new entrants, making the competitive landscape more rational
Company continues to advocate for uninterrupted ventilator access for patients experiencing temporary compliance interruptions
Margin and efficiency initiatives
SG&A as a percentage of revenue improved by 200 basis points year over year
Efficiency initiatives underway in intake, logistics, and labor per order
AI and machine‑based tools being implemented to improve operational cadence
Corporate G&A not scaling with revenue growth
Free cash flow improvement viewed as meaningful and sustainable
Guidance & Outlook
Net revenue expected to be 312 million to 320 million (prior 310 million to 320 million)
Adjusted EBITDA expected to be 65 million to 69 million (unchanged)
Net capex expected to be 9% to 10.5% of revenue (prior 10% to 11.5%)
Sequential revenue growth expected to be 3% to 5% per quarter (unchanged)
Ventilator new patient starts trending ahead of expectations
Valuation
I have VMD at 5.5x EV/TTM EBITDA and 5.2x EV/2026 EBITDA. My calculation has them about 9.3x TTM FCF and under 9x on a forward looking basis.
Looking back, this is at the low end of the valuation range.
Closing Thoughts
The setup going into the rest of 2026 is straightforward: continued execution in ventilation, scaling maternal health through the existing platform, and maintaining the momentum in sleep. With the low end of revenue guidance raised and capital intensity trending lower, the path to stronger free cash flow remains intact.
I can see them executing on another acquisition or potentially buybacks (or both) this year. I continue to hold through the pain.
Thanks for reading my work.
Dean
long VMD