Tandem Diabetes Care, Inc. (NASDAQ:TNDM) Analysts Just Slashed This Year's Estimates
The latest analyst coverage could presage a bad day for Tandem Diabetes Care, Inc. (NASDAQ:TNDM), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.
Following the latest downgrade, Tandem Diabetes Care's 14 analysts currently expect revenues in 2023 to be US$788m, approximately in line with the last 12 months. Losses are expected to be contained, narrowing 19% per share from last year to US$2.79 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$879m and losses of US$2.06 per share in 2023. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.
See our latest analysis for Tandem Diabetes Care
The consensus price target fell 14% to US$41.00, implicitly signalling that lower earnings per share are a leading indicator for Tandem Diabetes Care's valuation.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Tandem Diabetes Care's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 0.6% by the end of 2023. This indicates a significant reduction from annual growth of 30% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.9% per year. It's pretty clear that Tandem Diabetes Care's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Tandem Diabetes Care. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Tandem Diabetes Care's revenues are expected to grow slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Tandem Diabetes Care.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Tandem Diabetes Care going out to 2025, and you can see them free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
