Electromed Inc. Common Stock (ELMD)

FairStock Score: 73/100 — STEADY

Key Financials

Strengths

• Generates $7 million in annual free cash flow (3.3% yield on market cap)
• Strong Piotroski F-Score of 7/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• High return on equity of 20.2% demonstrating efficient capital deployment
• Conservative balance sheet with debt-to-equity of just 0.00, providing financial flexibility
• Altman Z-Score of 15.4 confirms minimal bankruptcy risk and strong solvency

Concerns

• Trades significantly above Graham Number ($11) with negative 129% margin of safety—limited downside protection

AI Analysis

Electromed Inc. Common Stock is a micro-cap healthcare company valued at $214 million. The business generates $69 million in annual revenue with a 4.0% net margin and $7 million in free cash flow. From a quality standpoint, Electromed shows solid Piotroski F-Score of 7/9 and Altman Z-Score of 15.4 confirms fortress-level solvency. On valuation, the stock is reasonably priced at 24.7x earnings, with trades far above its Graham Number ($11) with no margin of safety. Growth dynamics show revenue growing at 16.3% and profit growth of 40.3%. Our composite FairStock Score of 73/100 reflects above-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Electromed's 16% revenue growth trajectory could accelerate as it captures additional market share in the healthcare sector. With $7 million in annual free cash flow (3.3% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the healthcare space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer