About TACTILE SYSTEMS TECHNOLOGY INC
Tactile Systems Technology, Inc., a medical technology company, engages in the development and provision of medical devices for chronic diseases in the United States. The company offers Flexitouch Plus system, a pneumatic compression device for the treatment of lymphedema; Entre system, a portable pneumatic compression device that is used for the at-home treatment of venous disorders, such as lymphedema and chronic venous insufficiency, including venous leg ulcers; and AffloVest, a portable high frequency chest wall oscillation test for the treatment of retained pulmonary secretions such as bronchiectasis, cystic fibrosis, and various neuromuscular disorders.
The company was incorporated in 1995 and is headquartered in Minneapolis, Minnesota.
TCMD operates in the Manufacturing | Medical Equipment | headquartered in MINNEAPOLIS, Minnesota | approximately 980 employees | led by CEO Daniel L. Reuvers.
Updated February 12, 2026
If you asked most investors to guess the single highest-ranked stock in a quantitative model scanning 7,300 U.S. companies, they would probably guess Nvidia, or Apple, or Microsoft. They would not guess Tactile Systems Technology.
TCMD is a $308 million medical device company based in Minneapolis. It makes pneumatic compression devices — wearable, at-home therapeutic equipment that treats chronic edema conditions, primarily lymphedema. The devices use calibrated pressure to move fluid through the lymphatic system, reducing swelling that affects millions of patients, many of them post-cancer treatment.
It is not a glamorous business. It does not have an AI narrative. It will never be on the cover of Bloomberg Businessweek. And yet our six-factor quantitative model, which evaluates every publicly traded company in the United States on quality, value, momentum, investment efficiency, financial stability, and short interest positioning, ranks it number one.
Here is why the numbers say what they say.
The Factor Profile: Strong Everywhere
TCMD's composite score of 93.2 is the highest among all 7,300 stocks this week. What makes it unusual is not any single exceptional factor — it is the consistency across all six.
| Factor | Score | Percentile Meaning |
|---|---|---|
| Quality | 80 | Top 20% on profitability |
| Value | 85 | Top 15% on valuation metrics |
| Momentum | 80 | Top 20% on price trend |
| Investment | 81 | Top 19% on capital discipline |
| Stability | 79 | Top 21% on balance sheet strength |
| Short Interest | 33 | Average — not heavily shorted |
Five of six factors above 79. No factor below 33. This is the quantitative equivalent of a student who scores in the 80th percentile on every section of the SAT — not the highest on any one measure, but the most consistently strong overall.
Most stocks that score in the 90th percentile on composite rely on one or two dominant factors to carry the weight. A biotech with 95 momentum. A value trap with a 98 value score. TCMD does not work that way. It ranks in the top quintile on quality, value, momentum, investment efficiency, and stability simultaneously. The model rewards balance, and TCMD has more of it than any other stock in the country.
The Business: Unglamorous, Profitable, Growing
Tactile Systems has carved out a niche in an underserved corner of healthcare. Lymphedema — chronic swelling caused by damage to or removal of lymph nodes, often a side effect of cancer treatment — affects an estimated 10 million Americans. The condition is lifelong, progressive, and until recently, undertreated.
TCMD's primary product, the Flexitouch system, is an FDA-cleared pneumatic compression device that patients use at home. It is covered by Medicare and most commercial insurance plans, which means the company has a built-in reimbursement framework that drives recurring revenue.
The business characteristics that the model's quality factor picks up on are striking for a company this size:
- Gross margin: 76 percent. This is not a typical medical device margin — it is closer to what you see in software. The devices are manufactured at relatively low cost, and the pricing is supported by insurance reimbursement rates that reflect the clinical value of the treatment.
- Operating margin: 13 percent. This is lower than the gross margin would suggest, reflecting the sales and marketing spend required to build awareness among physicians and patients. But it is positive and improving.
- Net margin: 10 percent. The company is solidly profitable. This is not a growth-stage money-loser hoping to reach profitability someday. It is profitable now.
- Revenue growth: 17 percent. Double-digit growth for a profitable medical device company with zero debt is rare. The growth is driven by both market expansion (more patients being diagnosed and treated) and commercial execution (better sales coverage).
- Debt-to-equity: 0.00. Zero. The company has no debt. This is the fact that the stability factor rewards most heavily. In an environment where rising interest rates have punished leveraged companies, TCMD's clean balance sheet is a genuine competitive advantage.
Value: The Numbers That Matter
TCMD's value score of 85 means it ranks in the top 15 percent of all stocks on valuation metrics. The key numbers:
- Price-to-book: 1.51. The market is paying 1.5 times the book value of the company's assets. For a medical device company with 76 percent gross margins and no debt, this is modest.
- Price-to-sales: 0.90. Less than one times revenue. You are paying 90 cents for every dollar of annual sales this company generates.
- EV/EBITDA: 6.12. The enterprise value is just over six times EBITDA. For context, the median EV/EBITDA for healthcare companies is typically 12 to 15 times. TCMD is trading at less than half its sector's average multiple.
The P/E ratio is not available because of accounting adjustments, but the EV/EBITDA tells the more important story for a company with no debt: you are buying a profitable, growing, zero-leverage medical device business for six times its operating cash flow.
Momentum: The Market Is Catching On
TCMD's momentum score of 80 means its stock price has been outperforming roughly 80 percent of all other stocks over the relevant measurement period. The stock is not going parabolic — there is no meme-stock mania here. But it is steadily appreciating as the market recognizes the value.
This is exactly the kind of momentum the academic literature says is predictive: not the explosive, attention-driven momentum of a stock going viral, but the quiet, fundamental-driven momentum of a business whose price is gradually catching up to its intrinsic value. Jegadeesh and Titman's seminal research shows that this type of momentum tends to persist for three to twelve months.
What Could Go Wrong
No stock ranks number one without risks, and it would be dishonest not to flag them.
Reimbursement risk. TCMD's revenue depends on Medicare and insurance coverage. Any change to reimbursement policies — rate cuts, coverage restrictions, or changes to the approval process — could materially impact revenue. This is the single biggest risk factor for the business.
Small-cap illiquidity. At $308 million in market cap, TCMD trades with lower volume than large-cap stocks. This means wider bid-ask spreads and the potential for sharper price moves on relatively small orders. Institutional investors with large positions may find it difficult to enter or exit without moving the stock.
Concentration risk. TCMD is essentially a single-product company. The Flexitouch system drives the vast majority of revenue. Diversification into additional product lines would reduce this risk, but it is not there yet.
Sales execution. The 17 percent revenue growth is driven by an expanding sales force reaching more physicians. If sales productivity declines or market penetration plateaus, growth could slow.
The model does not dismiss these risks. It acknowledges them through the stability score of 79 — strong, but not in the 90s. The model sees a company with real risks that are more than compensated by the quality of the business, the cheapness of the valuation, and the momentum of the price.
Why Number One Matters
Ranking number one out of 7,300 stocks does not mean TCMD will be the best-performing stock over the next month. Quantitative models do not make that promise. What it means is that, across six independently measured dimensions of stock quality — profitability, cheapness, price trend, capital discipline, balance sheet safety, and positioning — no other company in the United States scores as consistently well.
It is the absence of weakness, more than the presence of any single strength, that puts TCMD at the top. And in quantitative finance, absence of weakness is one of the strongest predictors of forward returns.
The market sees a $300 million medical device company. The model sees the best risk-reward profile in America.
Explore the full Tactile Systems (TCMD) analysis including DCF valuation, risk analytics, and factor breakdown, or view the complete stock rankings.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. All data is derived from Blank Capital's quantitative ranking model. Past performance does not guarantee future results.
