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Why Is Tandem Diabetes Care, Inc. (TNDM) Up 0.2% Since Last Earnings Report?

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It has been about a month since the last earnings report for Tandem Diabetes Care, Inc. (TNDM - Free Report) . Shares have added about 0.2% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Tandem Diabetes Care, Inc. due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Tandem Diabetes Q1 Net Loss Narrows, Guidance Up

Tandem Diabetes adjusted net loss of 7 cents for first-quarter 2021 was narrower than the year-ago adjusted net loss of 22 cents. However, the metric surpassed the Zacks Consensus Estimate of a loss of 15 cents.

GAAP net loss for the quarter was 8 cents, narrower than the year-ago net loss of 25 cents.

Revenues

Revenues in the quarter came in at $141 million, beating the Zacks Consensus Estimate by 14.9%. The top line surged 44% 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.

Quarter in Detail

Tandem Diabetes registered international sales of $37.7 million in the quarter under review, recording a 105% rise from first-quarter 2020. Domestic sales came in at $103.3 million, up 30% year on year.

International pump shipments surged 106% to 8,708 pumps. Domestic pump shipments jumped 26% year over year to 16,644 units.

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

Margins

Gross profit in the first quarter was $73.3 million, marking 45.8% year-over-year growth. Gross margin was, however, 51.9%, indicating an expansion of 64 basis points (bps).

Selling, general and administrative expenses rose 17.8% to $58.6 million in the quarter under review. Research and development expenses also increased 27.2% to $17.9 million.

Overall operating loss was $3.2 million, compared with the year-ago loss of $13.5 million.

Financial Position

Tandem Diabetes exited first-quarter 2021 with cash and cash equivalents, and short-term investments of $513.4 million compared with $484.9 million at the end of 2020.

2021 Guidance Raised

The company has updated its guidance for 2021.

For 2021, the sales projection has been raised to $625-$640 million, indicating annual sales growth of 25% to 28%. The company’s prior sales guidance for 2021 was in the range of $600-$615 million. The Zacks Consensus Estimate for 2021 revenues is pegged at $610.4 million.

Full-year international sales are expected in the range of $125-$130 million, which suggests annual sales growth of 50% to 56%. This also represents a significant improvement from the prior guidance of $105-$110 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted 7.94% due to these changes.

VGM Scores

Currently, Tandem Diabetes Care, Inc. has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. Notably, Tandem Diabetes Care, Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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