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Why Is Tandem Diabetes Care, Inc. (TNDM) Up 4.5% 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 4.5% in that time frame, underperforming 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 drivers.

Tandem Diabetes Q4 Earnings Lag Estimates, Revenues Top

Tandem Diabetes Care, Inc.’s reported GAAP net earnings per share for the quarter was 16 cents, declining from the year-ago earnings per share of 22 cents. This figure missed the Zacks Consensus Estimate by 20%.

Full-year GAAP net earnings per share was 24 cents, a significant improvement from the year-ago loss of 56 cents. This figure too missed the Zacks Consensus Estimate by 22.6%.

Revenues

Revenues in the quarter came in at $210 million,up 24.9% year over year and beating the Zacks Consensus Estimate by 6.1%. The strength in the top line was driven by robust pump shipments and growth in the company’s installed base, both in and outside the United States.

Full-year revenues were $702.8 million, reflecting a 40.9% uptick from the year-ago period. Again, the metric surpassed the Zacks Consensus Estimate by 1.7%.

Quarter in Detail

Tandem Diabetes registered international sales of $49.1 million in the quarter under review, recording a 70.9% rise from fourth-quarter 2020. Domestic sales totaled $160.9 million, up 15.5% year over year.

International pump shipments surged 45.9% to 11,873 pumps. Domestic pump shipments jumped 4.7% year over year to 25,712 units.

The company believes that the surge in pump shipments resulted from the continued adoption of the t:slim X2 technology. Further, domestic pump shipments benefitted from the traditional seasonal spike given the timing of insurance deductible resets and the highest volume of renewals the company has delivered in a single quarter.

Margins

Gross profit in the fourth quarter was $113.7 million, marking 25.6% year-over-year growth. Gross margin was 54.2%, indicating an expansion of 28 basis points (bps).

Selling, general and administrative expenses rose 31.1% to $71.5 million in the quarter under review. Research and development expenses also increased 69.7% to $29.5 million.

Overall operating income was $12.7 million, down 31.7% from the year-ago quarter. Adjusted operating margin contracted 504 bps from the year-ago quarter to 6.1%

Financial Position

Tandem Diabetes exited 2021 with cash and cash equivalents, and short-term investments of $623.8 million compared with $484.9 million recorded at the end of 2020.

2022 Guidance

Tandem Diabetes has issued its financial guidance for 2022.

For the year, sales are projected in the range of $845-$860 million, indicating annual sales growth of 20% to 22%. The Zacks Consensus Estimate for 2022 revenues is pegged at $814.36 million.

Full-year international sales are estimated in the range of $215-$220 million, which suggests annual sales growth of 21% to 24%.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.

The consensus estimate has shifted 350% due to these changes.

VGM Scores

Currently, Tandem Diabetes Care, Inc. has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, 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 upward for the stock, and the magnitude of these revisions looks promising. Notably, Tandem Diabetes Care, Inc. has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.


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