When Can We Expect A Profit From Tandem Diabetes Care, Inc. (NASDAQ:TNDM)?
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Tandem Diabetes Care, Inc.'s (NASDAQ:TNDM): Tandem Diabetes Care, Inc., a medical device company, designs, develops, and commercializes various products for people with insulin-dependent diabetes in the United States. The US$3.9b market-cap company’s loss lessens since it announced a -US$122.6m bottom-line in the full financial year, compared to the latest trailing-twelve-month loss of -US$112.9m, as it approaches breakeven. As path to profitability is the topic on TNDM’s investors mind, I’ve decided to gauge market sentiment. In this article, I will touch on the expectations for TNDM’s growth and when analysts expect the company to become profitable.
Check out our latest analysis for Tandem Diabetes Care
According to the 13 industry analysts covering TNDM, the consensus is breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$4.5m in 2021. Therefore, TNDM is expected to breakeven roughly 2 years from today. In order to meet this breakeven date, I calculated the rate at which TNDM must grow year-on-year. It turns out an average annual growth rate of 63% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
I’m not going to go through company-specific developments for TNDM given that this is a high-level summary, though, keep in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing I’d like to point out is that TNDM has no debt on its balance sheet, which is quite unusual for a cash-burning loss-making, growth company, which typically has high debt relative to its equity. TNDM currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
This article is not intended to be a comprehensive analysis on TNDM, so if you are interested in understanding the company at a deeper level, take a look at TNDM’s company page on Simply Wall St. I’ve also compiled a list of key aspects you should look at:
Valuation: What is TNDM worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether TNDM is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Tandem Diabetes Care’s board and the CEO’s back ground.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
