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Insulet (PODD) Hits a 52-Week High: What's Driving the Stock?

Zacks Equity Research

On Nov 14, shares of Insulet Corporation PODD reached a new 52-week high of $179.31, closing the session marginally lower at $176.88. In fact, the stock has rallied nearly 22.1% since its third-quarter earnings announcement on Nov 5.

The company’s strong third-quarter earnings, backed by robust global uptake of the Omnipod system, and impressive full-year guidance prompted the rally.

Let us delve deeper into the growth propellers.

Insulet’s Q3 Earnings Snapshot

The company exited the third quarter on a promising note, with better-than-expected earnings and revenue numbers. The year-over-year improvement in revenues on the solid uptake of the Omnipod system, both in the United States and across international markets, has been encouraging.

In the third quarter, the company successfully expanded the Omnipod DASH coverage for commercial, Medicare and Medicaid beneficiaries. By the end of the third quarter, the coverage was expanded to more than 50% of all Medicare beneficiaries.

 

Gross profit in the reported quarter was up 20.7% from the prior-year quarter. Although total operating expenses escalated 11.5% from the year-ago quarter’s figure, the operating margin expanded 431 bps to 8.9% in the third quarter.

The lifted revenue outlook for 2019 too buoys optimism among the investors, indicating this bullish momentum to continue through the rest of the year.

Other Growth-Driving Factors

The market is upbeat about Insulet obtaining FDA approval in October for the use of the Fiasp (fast-acting insulin aspart) alongside its Omnipod Insulin Management System and the Omnipod DASH Insulin Management System for adults. Fiasp is the first-ever fast-acting mealtime insulin injection that does not require a pre-meal dosing recommendation.

Another crucial regulatory approval secured by Insulet in September was for the use of its Alternate Controller Enabled Infusion (ACE) Pump with the Omnipod DASH Insulin Management System. Following this, Insulet will be able to market its Omnipod DASH System as an integrated insulin pump (Omnipod DASH ACE Pump). Hence investors are optimistic about the growth prospects of the company.

Progress in Omnipod Horizon

At the end of the third quarter, Insulet was in the final stages of the Omnipod Horizon development and is well on track to start pivotal trials in the fourth quarter of 2019. The company is also on track to secure Omnipod’s FDA approval as a component of the Tidepool Loop automated insulin delivery system.

We believe that these efforts will continue driving the company’s performance, helping it reach new highs.

Meanwhile, Insulet had a great run on the bourses in the past year. Over the past year, the stock has surged 116%, outperforming the broader industry’s growth of 3.7%. The company currently has a market cap of $10.98 billion. The next-year growth rate of 250% instills optimism.

Zacks Rank & Stocks Worth a Look

Insulet currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are Haemonetics Corporation HAE, NuVasive, Inc NUVA and ResMed RMD, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Haemonetics has a projected long-term earnings growth rate of 13.5%.

NuVasive has an expected long-term earnings growth rate of 10.9%.

ResMed has a long-term earnings growth rate of 12.9%.

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Haemonetics Corporation (HAE) : Free Stock Analysis Report
 
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