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Tandem Diabetes (TNDM) Q1 Loss Widens, Revenues Top Estimates

Zacks Equity Research

Tandem Diabetes Care, Inc. TNDM reported adjusted loss per share of 22 cents for first-quarter 2020, 22.2% wider than the year-ago metric as well as the Zacks Consensus Estimate of a loss of 18 cents.

Reported net loss came in at 25 cents per share, narrower than year-ago loss of 40 cents.

Revenues in the quarter came in at $97.9 million, beating the Zacks Consensus Estimate by 15.9%. The top line surged 48.6% year over year on robust demand for the company’s Control-IQ,which, too some extent, offset some of the inherent sales pressure due to COVID-19.

Q1 in Detail

Tandem Diabetes registered international sales of $18.4 million in the quarter under review, recording a 62% jump from first-quarter 2019. Domestic sales came in at $79.5 million, up 46% year on year.

In the first quarter, Tandem Diabetes’ worldwide pump shipments rose 18% year over year to 17.378 units. However international shipment was down 17% to 4,220 pumps. Domestic pump shipments jumped 36% year over year to 13,158 units.

Tandem Diabetes Care, Inc. Price, Consensus and EPS Surprise

Tandem Diabetes Care, Inc. Price, Consensus and EPS Surprise

Tandem Diabetes Care, Inc. price-consensus-eps-surprise-chart | Tandem Diabetes Care, Inc. Quote

In late January, the company commenced new pump shipments with Control-IQ and also offered a no-cost software update to its in warranty t:slim X2 users. Till the time of the earnings call, more than 30,000 people updated their t:slim X2 to Control-IQ technology.

Margins

Gross profit in the March-end quarter was $50.3 million, marking 50.7% year-over-year growth. Gross margin was 51.3%, up 79 basis points (bps).

Total operating expenses were $68.8 million, up 43.9% year over year. The company registered operating loss of $13.6 million in the first quarter, wider than a loss of $10.9 million a year ago.

Financial Position

Tandem Diabetes exited the first quarter with cash and cash equivalents of $160.2 million compared with $176.5 million recorded at the end of 2019.

Guidance Update

Amid coronavirus-led uncertainties, Tandem Diabetes withdrewits financial guidancefor the full year. However, despite all anticipated hurdles, for the second quarter, the company expects domestic growth from the year-ago period based on positive customer feedback for its t:slim X2 with Control-IQ technology. For the quarter, sales are estimated to be at least $85 million, including international sales of roughly $10 million.

Our Take

Tandem Diabetes delivered better-than-expected revenues in the first quarter. 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. The company’s second-quarter 2020 sales forecast also looks upbeat amid the coronavirus crisis.

However, the company’s loss per share widened year over year.

Zacks Rank & Stocks to Consider

Currently, Tandem Diabetes carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader medical space are Aphria Inc. APHA, Biogen Inc. BIIB and Eli Lilly and Company LLY.

Aphria reported third-quarter fiscal 2020 adjusted EPS of 2 cents in contrast to the Zacks Consensus Estimate of a loss of 4 cents. Its net revenues of $64.4 million outpaced the consensus estimate by 14.6%. The company carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Biogen currently carries a Zacks Rank #2. It reported first-quarter 2020 adjusted EPS of $9.14, which surpassed the Zacks Consensus Estimate by 18.1%. Its revenues of $3.53 billion outpaced the consensus mark by 3.2%.

Eli Lilly delivered first-quarter 2020 EPS of $1.75, outpacing the Zacks Consensus Estimate by 12.9%. Its first-quarter revenues of $145.3 million surpassed the consensus estimate by 6.3%. The company currently sports a Zacks Rank #1.

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