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Here's Why You Should Buy Tandem Diabetes (TNDM) Stock Now

Zacks Equity Research

Tandem Diabetes Care, Inc. TNDM has been gaining investor confidence on continued encouraging performance. Over the past year, the stock has gained 1421.5% in comparison with the industry’s 2.1% increase and the S&P 500’s 7% decline.

This renowned developer and marketer of products for people with insulin-dependent diabetes has a market cap of $2.42 billion. The company has an earnings growth rate of 20% for the next three to five years.

With solid prospects, this Zacks Rank #2 (Buy) stock is an attractive pick for investors at the moment.

What Makes the Stock Worth a Bet?

Focus on International Markets

In 2017, Tandem Diabetes announced plans to begin commercialization of t:slim X2 in some new geographies. In October 2018, the company received Health Canada approval for the same.

Furthermore, Tandem Diabetes recently raised the sales guidance for 2018, buoyed by consistent strength in domestic sales in the third quarter along with the recent launch of the t:slim X2 Insulin Pump in select geographies. Notably, the updated sales guidance for 2018 includes a projected $7-$8 million of sales in select regions outside of the United States, which begun in August 2018.

Tandem Diabetes is consistently focusing on strengthening global presence. In this regard, the company’s t:slim X2 Insulin Pump is currently under review by Health Canada. On obtaining the approval, Tandem Diabetes is planning to launch t:slim X2 Insulin Pump  in Canada in the fourth quarter of 2018.

Earlier this year, Tandem Diabetes informed about entering into agreements with independent distributors for markets in Australia, New Zealand, Italy, Scandinavia, South Africa, Spain and the United Kingdom.

According to International Diabetes Federation estimates, roughly 425 million people had diabetes across the globe in 2017, of which around 10% or 42.5 million had type 1. Thus, the company’s decision to go global has come at the right time and will help it cash in on the bountiful opportunities in the niche market.

Impressive Product Pipeline

Tandem Diabetes constantly undertakes innovation and develops products to cater to consumers’ and clinical needs. Currently, products under development include AID systems, a next-generation hardware platform, as well as connected (mobile) health offerings. The company is on track to launch its second-generation AID system — t:slim X2 with Control IQ — in the summer of 2019. Per Tandem Diabetes, this AID system is expected to integrate the t:slim X2 pump with the treat-to-range technology that the company licensed from TypeZero Technologies LLC as well as Dexcom’s G6 sensor.

Subject to FDA approval, the company plans to launch t:sport Insulin Delivery System, its next generation hardware platform, in 2020 or 2021.

Tandem Diabetes is also working on a mobile application that is being designed to use the Bluetooth radio capability to wirelessly upload pump data to t:connect, receive notification of pump alerts and alarms as well as integrate other health related information from third-party sources. This mobile application will also support pump-control capabilities for Tandem Diabetes’ products under development.

Other Key Picks

Other top-ranked stocks in the broader medical space are Veeva Systems VEEV, Illumina, Inc. ILMN and Amedisys, Inc. AMED.

Veeva Systems’ long-term earnings growth rate is estimated at 19.5%. The stock flaunts a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Illumina, with a Zacks Rank #1, has a long-term earnings growth rate of 20.9%. The stock carries a Zacks Rank of 2 currently.

Amedisys’ long-term earnings growth rate is projected at 18.8%. The stock carries a Zacks Rank of 2 right now.

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