Insulet (PODD) Down 1.5% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Insulet (PODD). Shares have lost about 1.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Insulet due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Insulet Q4 Earnings Surpass Estimates, Margins Up
Insulet announced fourth-quarter 2021 adjusted earnings per share of 42 cents against the loss of 26 cents in the year-ago period. Earnings surpassed the Zacks Consensus Estimate by 40%.
The quarter’s adjustments exclude the impact from loss on extinguishment of debt of $0.8 million related to the company's repurchase of convertible notes.
For the full year, adjusted EPS was 24 cents, reflecting a stupendous surge of 140% from the year-ago period. It also beat the Zacks Consensus Estimate by 84.6%.
Revenues
Revenues in the fourth quarter totaled $307.7 million, beating the Zacks Consensus Estimate by 2.3%. Moreover, the top line jumped 25% from the year-ago number (up 25.7% at constant exchange rate or CER). Notably, quarterly revenues exceeded the company’s previous growth expectations of 19-25% at CER.
Full-year revenues were $1.09 billion, reflecting a 21.5% increase from the year-ago period (up 19.7% at CER). Revenues were in line with the Zacks Consensus Estimate.
Segment in Detail
Insulet’s total Omnipod revenues of $275.8 million reflect an increase of 19.3% year over year (up 20.1% at CER). International Omnipod revenues of $85.3 million rose 4.2% (up 6% at CER). U.S. Omnipod revenues grew 27.7% year over year to $190.5 million.
The Drug Delivery business revenues totaled $31.9 million, up 112.7% year over year.
Margins
Gross profit in the reported quarter was $213.2 million, up 32.3% from the prior-year quarter. Gross margin of 69.3% expanded 383 basis points (bps).
Meanwhile, selling, general & administrative expenses fell 6.5% to $121.7 million. However, research and development expenses rose 9.1% year over year to $41.8 million.
Operating income totaled $49.7 million against the operating loss of $7.3 million in the prior-year quarter. Accordingly, operating margin in the fourth quarter expanded 1912 bps to 16.2%.
Cash Position
Insulet exited 2021 with cash and cash equivalents of $791.6 million compared with $947.6 million at the end of 2020.
2022 Guidance
Insulet has initiated its financial outlook for first-quarter 2022 and full-year 2022.
For 2022, the company expects revenue growth in the range of 12-16% at CER. The Zacks Consensus Estimate for total revenues is pegged at $1.27 billion.
Insulet’s total Omnipod revenue growth is expected in the range of 15-20% at CER. Meanwhile, the company Drug Delivery revenues are expected in the range of a fall of 35-30% at CER.
For the first quarter of 2022, Insulet projects revenue growth of 13-16% at CER. The Zacks Consensus Estimate for total revenues is pegged at $291.7 million.
Total Omnipod revenues are likely to grow 13-16% at CER. However, Drug Delivery revenues are expected in the range of 20-25%.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 10.8% due to these changes.
VGM Scores
At this time, Insulet has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Insulet has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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