Back to top

Image: Bigstock

Tandem Diabetes' (TNDM) Q4 Earnings, Revenues Top Estimates

Read MoreHide Full Article

Tandem Diabetes Care, Inc.’s (TNDM - Free Report) adjusted earnings per share (“EPS”) of 24 cents for fourth-quarter 2020 registered a stupendous 500% surge from the year-ago reported EPS of 4 cents. Further, the quarter's adjusted EPS exceeded the Zacks Consensus Estimate by 84.6%.

GAAP EPS came in at 22 cents per share, up by 450% from the year-ago figure.

Full-year GAAP loss per share was 56 cents, wider than the year-ago loss of 42 cents per share.

Revenues

Revenues in the quarter came in at $168.1 million, beating the Zacks Consensus Estimate by 19.1%. The top line surged 55% year over year despite sales pressure due to COVID-19. Robust adoption of the company’s Control-IQ technology significantly boosted the top line in the reported quarter.

Full-year revenues were $498.8 million, reflecting a 37.7% uptick from the year-ago period. Again, the metric surpassed the Zacks Consensus Estimate by 5.7%.

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

Q4 in Detail

Tandem Diabetes registered international sales of $28.7 million in the quarter under review, recording a 182% uptick from fourth-quarter 2019. Domestic sales came in at $139.3 million, up 42% year on year.

International pump shipments surged 278% to 8,133 pumps. Domestic pump shipments jumped 41% year over year to 24,552 units.

The company believes that surge in pump shipments resulted from the continued momentum of its Control-IQ technology.

Margins

Gross profit in the December-end quarter was $90.6 million, marking a 50.2% year-over-year growth. Gross margin was, however, 53.9%, indicating a contraction of 172 basis points (bps).

Selling, general and administrative expenses rose 19.7% to $54.5 million in the quarter under review. Research and development expenses also rose 38.3% to $17.4 million.

Overall operating profit was $18.7 million, up 770.4% year over year. Operating margin expanded 913 bps year over year to 11.1%.

Financial Position

Tandem Diabetes exited 2020 with cash and cash equivalents, and short-term investments of $484.9 million compared with $176.5 million recorded at the end of 2019.

2021 Guidance

Based on the strength in demand for t:slim X2 insulin pump across the globe, Tandem Diabetes has issued its financial guidance for the year 2021.

For the year, sales are estimated to be in the range of $600-$615 million, representing annual sales growth of 20-23% compared with 2020. The Zacks Consensus Estimate for 2021 revenues is pegged at $564.3 million.

The full-year sales outlook includes international sales of $105-$110 million.

Our Take

Tandem Diabetes delivered better-than-expected results in the fourth quarter of 2020. A robust top line despite pandemic-led business disruptions is impressive. Strong domestic and international pump sales, along with robust domestic and international pump shipments, buoy optimism. Continued strength in demand for t:slim X2 insulin pump across the globe, and rising customer adoption of the company’s Control-IQ technology, look encouraging. A robust product pipeline is also impressive. The company’s full-year sales forecast also looks upbeat amid the coronavirus crisis. Expansion of operating margin bodes well for the stock.

However, the unabated spread of the pandemic continues to pose challenges to the company’s operations, raising apprehensions.

Zacks Rank & Other Key Picks

Currently, Tandem Diabetes carries a Zacks Rank #2 (Buy).

A few other top-ranked stocks in the broader medical space are Abbott Laboratories (ABT - Free Report) , Hologic, Inc. (HOLX - Free Report) and IDEXX Laboratories, Inc. (IDXX - Free Report) .

Abbott reported fourth-quarter 2020 adjusted EPS of $1.45, which surpassed the Zacks Consensus Estimate by 6.6%. Fourth-quarter worldwide sales of $10.7 billion outpaced the consensus mark by 7.9%. The company currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Hologic reported first-quarter fiscal 2021 adjusted EPS of $2.86, beating the Zacks Consensus Estimate by 33.6%. The company currently carries a Zacks Rank #2.

IDEXX reported fourth-quarter 2020 adjusted EPS of $2.01 which surpassed the Zacks Consensus Estimate by 40.6%. Revenues of $720.9 million beat the consensus mark by 5.8%. The company currently carries a Zacks Rank #2.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.

Click here for the 4 trades >>