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

Zacks Equity Research

On Sep 30, shares of Insulet Corporation PODD reached a 52-week high of $168, closing the session marginally lower at $ 167.95.

Over the past year, shares of Insulet have rallied 63.6% compared with the industry’s growth of 1%. The current level is also higher than the S&P 500 index’s decline of 0.6%.

The company, being a major player in developing continuous glucose monitoring (CGM) systems for diabetic people and healthcare providers, is expected to scale new highs in the near term. It has average positive earnings surprise of 108.3% for the trailing four quarters.

The estimate revision trend for the next year is impressive as well. Over the past 30 days, the Zacks Consensus Estimate for the company’s earnings has risen 6.3% to 84 cents.

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

 


 

Factors Driving Insulet

Product Launches: The company recently launched its next-generation insulin management platform, Omnipod DASH. Insulet anticipates DASH, the only insulin pump with no upfront charge and no four-year lock-in period, to be a turning point in its efforts to increase customer base.

Strong Pipeline: Market also seems upbeat about the company’s slew of innovations. It currently plans to launch a new platform, Omnipod Horizon, which is expected to improve glycemic control with both hybrid-closed loop and personal smartphone control.

Also, the company is working with Tidepool to get FDA approvals for the DIY communities iOS-based loop algorithm and automated insulin delivery system to be used on the Omnipod.

Strong International Presence: Investors also seem bullish on strong adoption of Omnipod DASH in the Europe market. Results of the company have been quite impressive in the U.K. and France. In this regard, the industry is expected to reach approximately $1325.9 million globally at a CAGR of 15.8% between 2019 and 2025.

Operational Excellence: Insulet started operating its first highly automated manufacturing line in the United States. With this, the company expects to gain significant efficiencies and expand gross margin over the long term, given the lower cost of production.

It is looking forward to install the second manufacturing unit later this year, which is expected to boost growth, provide manufacturing redundancy and support efficiency. It is also likely to aid efficient and effective technology transfer of product innovation into manufacturing.

Revenue Guidance Upbeat: Exiting the robust first half of 2019 and observing a steady demand for Omnipod DASH, it raised the yearly revenue guidance to $700-$715 million or growth of 24-27% from the year-ago quarter’s reported figure, whereas it mentioned growth of 18-22% earlier. This indicates that the company expects the ongoing strong momentum to continue throughout the rest of the year. This also raised investors’ optimism on the stock.

Stocks to Consider

Some better-ranked stocks in the broader medical space are Valeritas Holdings, Inc. VLRX, Myomo, Inc. MYO and National Vision Holdings, Inc. EYE.

Valeritas currently carries a Zacks Rank #2 (Buy). Its third-quarter 2019 earnings growth rate is projected at 43.8%.

Myomo’s long-term expected earnings growth rate is pegged at 25%. The stock currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

National Vision’s long-term expected earnings growth rate is pegged at 17.2%. The company has a Zacks Rank #2 at present.

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Insulet Corporation (PODD) : Free Stock Analysis Report
 
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