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Tandem Diabetes (TNDM) Hits a 52-Week High on Solid Prospects

Zacks Equity Research

Share price of Tandem Diabetes Care, Inc. TNDM scaled a new 52-week high of $74.37 on Mar 13, closing nominally lower at $71.42. Over the past six months, the company has gained 39.6%.

The stock has a market cap of $4.12 billion.

Further, Tandem’s estimate revision trend for the current quarter is favorable. In the past 30 days, two estimates have moved up while none shifted down. Consequently, estimates were up from a loss of 35 cents per share to a loss of 28 cents.

The company’s five-year historical growth rate is also favorable at 35% as compared with the industry’s 27.1% and the S&P 500’s 3.9%.

Tandem currently has a Zacks Rank #3 (Hold).

Growth Drivers

Product Launches Continue: In the last-reported quarter, the t:slim X2 Insulin Pump obtained commercial license in Canada. Also, the FDA classified t:slim X2 as a new device category called alternate controller enabled infusion pumps. This category is  referred to as ACE pumps and is related to the FDA's interoperability initiative.

Tandem Diabetes Care, Inc. Price


Tandem Diabetes Care, Inc. Price | Tandem Diabetes Care, Inc. Quote

The market is optimistic about Tandem’s plan to launch a mobile application in the first half of 2019. The application will use Bluetooth radio capability to wirelessly upload pump data to t:connect, receive notification of pump alerts and alarms as well as integrate other health related information from third-party sources.

The company intends to use its remote software update tool, Tandem Device Updater, to resolve a Control IQ technology issue which has been identified during the ongoing DCLP3 phase of the International Diabetes Closed Loop (IDCL) clinical trial.

Strong Product Shipment: One of the key growth drivers for Tandem in the last two quarters has been the successful rollout of the t:slim X2 with the Basal-IQ technology. This next-generation insulin pump saw robust sales in domestic and international markets. This boosted supply capacity and renewal sales, strengthening the company’s core business. In the third and fourth quarter, Tandem’s pump shipments saw a year-over-year surge of 118% and 133%, respectively. Domestic sales of Animas insulin pumps were an all-time high in the fourth quarter.

International Distribution Deals Fuel Growth: In 2018, the company entered agreements with Australasian Medical & Scientific Ltd (AMSL) and New Zealand Medical & Scientific Ltd (NZMS) to distribute insulin pump products in Australia and New Zealand. Around the same time, Tandem partnered with Movi SpA for the commercialization of t:slim X2 in Italy.

The unique pump platforms, top-notch customer service, automated insulin delivery programs and expansion in the international market are expected to fuel Tandem’s growth as well.

Key Picks

A few better-ranked stocks in the broader medical space are ABIOMED, Inc., ABMD, Penumbra, Inc., PEN and Masimo, Inc. MASI. Notably, each of these stocks currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

ABIOMED’s long-term earnings growth rate is expected at 27.67%.

Penumbra’s long-term earnings growth rate is projected at 20.93%.

Masimo’s long-term earnings are estimated to grow 15.60%.

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