On Jun 1, 2020, we issued an updated research report on Tandem Diabetes Care, Inc. TNDM. The company's expansion initiatives in the global markets are a major positive. However, its heavy dependence on the sales of insulin pumps and recurring operating losses raise concerns. Tandem Diabetes currently carries a Zacks Rank #3 (Hold).
Shares of the company have outperformed its industry in the past six months. The stock has risen 23.3% against the industry’s 0.1% loss.
The company delivered better-than-expected revenues in the first quarter. Despite some of the sales pressure due to COVID-19, the top line surged year over year on robust demand for Control-IQ. Strong domestic pump sales and the company’s expansion in international markets boosted the top line significantly during this period. We are impressed with the surge in global pump shipments.
Tandem Diabetes Care, Inc. Price
Tandem Diabetes Care, Inc. price | Tandem Diabetes Care, Inc. Quote
Further, a robust product portfolio and new launches buoy optimism. In January 2020, the company commercially launched the t:slim X2 insulin pump with Control-I technology in the United States. Tandem Diabetes is also on track to launch its second-generation AID system — t:slim X2 — with Control IQ in international markets in the latter half of 2020.
However, the coronavirus pandemic is wreaking havoc on the economy. Tandem Diabetes expects to witness a greater impact in its international markets. Nonetheless, its stand-alone endocrinology clinic visits are not bearing the brunt of the pandemic as these are currently focused on taking care of the critically ill.
Meanwhile, amid coronavirus-led uncertainties, Tandem Diabetes had to withdraw its financial guidance for the full year.
Rising operating expenses, heavy dependence on insulin pumps and stiff competition are other concerns.
Further, excessive reliance on the sales of insulin pumps poses threat to the company. Moreover, the company's operations might be affected by a tough competitive environment.
Some better-ranked stocks from the broader medical space are Aphria Inc. APHA, Surmodics, Inc. SRDX and Owens Minor, Inc. OMI.
Aphria’s long-term earnings growth rate is projected at 24.6%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Surmodics’ long-term earnings growth rate is estimated at 10%. The company presently sports a Zacks Rank #1.
Owens Minor’s long-term earnings growth rate is estimated to be 8.3%. It currently carries a Zacks Rank #2.
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