Insulet (PODD) Up 31.5% Since Q3 Earnings: What's Driving It?
Insulet, Inc.‘s PODD shares have surged 32.7% since the last earnings compared with the industry’s increase of 6.7%. The Medical sector has declined 8.2% in the said time frame. The company has a market capitalization of $36.98 billion.
The strong adoption of Omnipod 5 and focused market expansion and innovation are driving this Zacks Rank #1 (Strong Buy) company. Its earnings are expected to grow 39.2% in the next five years. POOD’s ROE for the trailing 12 months was 23.9%, better than the industry average of (17.1%).
Will the Upside Continue?
The Zacks Consensus Estimate for PODD’s 2023 earnings is pegged at $1.90, indicating a surge from the year-ago reported figure of 7 cents. The consensus estimate for 2023 revenues is pegged at $1.64, indicating a year-over-year improvement of 25.8%.
The company is witnessing continued uptake of Omnipod through the U.S. pharmacy channel. Insulet continues to drive increased awareness for Omnipod through its direct-to-consumer advertising campaign in the United States and across select international markets. Omnipod is specifically designed for individuals on Multiple Daily Insulin Injections (MDI). The company is driving pump penetration across all age groups in both the Type 1 and Type 2 markets while also gaining in terms of market share in these markets.
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. The company estimates the total addressable market for Omnipod GO is at least 3 million people in the United States alone. The company expects to begin a small pilot program this year in select locations and is on track for a commercial launch in 2024. In October, the company received the 510(k) clearance for the Omnipod 5 iOS app.
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Of late, Insulet is making significant investments to advance the diabetes business. In February 2023, Insulet acquired the assets of Automated Glucose Control LLC (AGC) — a company in Palo Alto, California, focused on developing and commercializing best-in-class automated insulin delivery technology. The same month, Insulet acquired assets related to Bigfoot’s pump-based automated insulin delivery (AID) technologies. Insulet paid $25M for the acquisition, which includes certain Bigfoot patents related to pumps that may be used for AID therapy.
Further, raised 2023 guidance is an indicator of sustained growth. The company raised its revenue growth guidance to 26-27% (up from the earlier band of 22-25%).
Insulet’s Total Omnipod revenue growth is expected in the range of 29-30% (25-28% expected previously). The company reiterated its expectation of Drug Delivery revenue decline to 50-45%.
For the fourth quarter of 2023, Insulet projects revenue growth of 22-25%. The Zacks Consensus Estimate for total revenues is pegged at $397.3 million.
Total Omnipod revenues are likely to grow 22-25%. Drug Delivery revenues are expected to be in the range of 0-70% ((approximately $3 million to $5 million).
Estimate Trends
The Zacks Consensus Estimate for PODD’s 2023 and 2024 has moved 18.8% and 15.2% north, respectively, in the past 90 days, reflecting analyst optimism.
Key Picks
Some better-ranked stocks in the broader medical space are DaVita Inc. DVA, Biodesix BDSX and Integer Holdings Corporation ITGR.
DaVita, sporting a Zacks Rank #1 at present, has an estimated long-term growth rate of 18.3%. DVA’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 36.55%. You can see the complete list of today’s Zacks #1 Rank stocks here.
DaVita’s shares have risen 30.6% year to date compared with the industry’s 1.6% growth.
Biodesix, carrying a Zacks Rank of 2 (Buy), has an estimated growth rate of 32.3% for 2024. BDSX’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, delivering an average surprise of 9.76%.
Biodesix’s shares have declined 36.5% year to date against the industry’s 12.6% decline.
Integer Holdings, sporting a Zacks Rank of 1, has an estimated long-term growth rate of 15.8%. ITGR’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 11.9%.
Integer Holdings’ shares have rallied 30.6% year to date against the industry’s 7.3% decline.
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DaVita Inc. (DVA) : Free Stock Analysis Report
Insulet Corporation (PODD) : Free Stock Analysis Report
Integer Holdings Corporation (ITGR) : Free Stock Analysis Report
Biodesix, Inc. (BDSX) : Free Stock Analysis Report
