Here's Why You Should Invest in Insulet (PODD) Stock for Now
Insulet Corporation PODD is progressing well with its four-pillar strategy that targets focused market expansion and innovation. The company has been making significant progress with respect to its development roadmap of the Omnipod 5 system. Further, Insulet registered continued strong adoption of Omnipod DASH in its international markets.
In the past three months, this Zacks Rank #1 (Strong Buy) stock has gained 38.8% compared with a 9% rise of the industry and a 10.8% rise of the S&P 500 composite.
The developer, manufacturer and distributor of insulin delivery systems has a market capitalization of $15.46 billion. Insulet projects a long-term estimated earnings growth rate of 39.2% compared with 11.8% of the industry.
Let’s delve deeper.
Upsides
Focus on Market Expansion and Operational Excellence: Insulet continues to drive growth with Omnipod DASH, both in the international markets and in the United States, especially in the type 2 diabetes market.
As per the company’s recent update, Omnipod 5 continues to drive customer adoption from all market segments. Insulet expects to build on the leading competitive position in this market and expand its total addressable market with the planned 2024 commercialization of the new basal-only pod. Fueled by the success of Omnipod 5, the company received clearance for Omnipod GO in the United States, which should build on a type 2 leadership position.
Omnipod DASH’s Market Access Expansion Continues: Omnipod DASH continues to be the leading insulin pump offer with an indication for use in the Type 2 market. While the company is yet to progress with Omnipod 5 Automated Insulin Delivery (AID) in the Type 2 market, the underlying demand for Omnipod DASH in the Type 2 market is encouraging. In third-quarter 2023, Insulet registered quarter-over-quarter sales growth with Omnipod DASH.
Omnipod 5, a New Focus: Insulet has been making progress with respect to its development roadmap of the Omnipod Horizon (now Omnipod 5) automated insulin delivery (AID) system.
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Per the third-quarter earnings update, Omnipod 5 continues to disrupt the diabetes technology market as the only FDA-approved, fully disposable, pod-based automated insulin delivery system. Omnipod 5 continues to be a driving force of the strong U.S. growth. In the third quarter, U.S. new customers started coming from multiple daily injections, and legacy tubed pumps were an estimated 80-20 percent split, which is in line with the company’s historical mix.
Strong Solvency but Leveraged Balance Sheet: Insulet exited the third quarter of 2023 with cash and cash equivalents of $685.4 million, compared with $660 million at the end of the second quarter. Long-term debt was $1.37 billion in the period, slightly down from $1.39 billion at the end of the second quarter. Although the quarter’s total debt was much higher than the corresponding cash and cash equivalent level, the company's short-term payable debt of $50 million is much less than the cash and cash equivalents and short-term investments. This is good news in terms of the company’s solvency level, as at least during the year of economic downturn, the company is obligated to much lower debt repayment.
Estimate Trend
The Zacks Consensus Estimate for Insulet’s 2023 earnings per share (EPS) has moved up from $1.60 to $1.91 in the past 90 days.
The Zacks Consensus Estimate for the company’s 2023 revenues is pegged at $1.64 billion. This suggests a 25.9% rise from the year-ago reported number.
Key Picks
Some other top-ranked stocks in the broader medical space are Haemonetics HAE, Penumbra PEN and DexCom DXCM, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Haemonetics’ shares have increased 11.6% in the past year. Earnings estimates for Haemonetics have increased from $3.82 to $3.86 in 2023 and $4.07 to $4.11 in 2024 in the past 30 days.
HAE’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 16.1%. In the last reported quarter, it posted an earnings surprise of 5.3%.
Estimates for penumbra’s 2023 earnings per share have increased from $1.73 to $2.04 in the past 90 days.
PEN’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 55.65%. In the last reported quarter, it delivered an average earnings surprise of 45.7%.
Estimates for DexCom’s 2023 earnings per share have increased from $1.23 to $1.41 in the past 30 days.
DXCM’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 36.4%. In the last reported quarter, it delivered an average earnings surprise of 47.1%.
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Haemonetics Corporation (HAE) : Free Stock Analysis Report
DexCom, Inc. (DXCM) : Free Stock Analysis Report
Insulet Corporation (PODD) : Free Stock Analysis Report
Penumbra, Inc. (PEN) : Free Stock Analysis Report
