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Here's Why You Should Hold on to Insulet (PODD) Stock For Now
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Insulet Corporation (PODD - Free Report) is gaining from robust uptake of the Omnipod system. Moreover, the bullish 2022 outlook raises investor confidence in the stock. However, economic uncertainty and stiff competition raise apprehensions.
Over the past year, the Zacks Rank #3 (Hold) stock has lost 6.4% versus a 20.4% fall of the industry. The S&P 500 rose 5.5% in the said time frame.
The renowned developer, manufacturer and marketer of insulin delivery systems has a market capitalization of $18.39 billion. In the fourth quarter of 2021, the company’s earnings surpassed the Zacks Consensus Estimate by 40%.
Let’s delve deeper,
Key Drivers
Omnipod’s Market Access Expansion Continues: Insulet has achieved several milestones with respect to expanding Omnipod’s market access. In the fourth quarter, Insulet’s U.S. and international diabetes product lines achieved solid results, with total Omnipod growth of 19.3% year over year. The company registered U.S. Omnipod revenue growth of 27.7%, led by a growing customer base, Omnipod DASH adoption and ongoing mix benefit as the company shifts volume into the pharmacy channel. Omnipod DASH continues to ramp up and drove almost 80% of the U.S. new customer addition. International Omnipod revenues rose 6% at CER in the fourth quarter of 2021.
Diabetes Market Boom: An aging population, unhealthy lifestyle, rising awareness and higher expenditure on healthcare are likely to continue driving the highly competitive diabetes market. Per a report by Fortune Business Insights, the global diabetes device market size is expected to reach $33.55 billion by 2026 from $20.92 billion in 2019, at a CAGR of 6.1%.
The company noted that its international expansion will further increase its global addressable market beyond the 11 million to 12 million people living with insulin-dependent diabetes throughout the global markets.
Bullish Guidance: Insulet has initiated its financial outlook for first-quarter 2022 and full-year 2022.
For 2022, the company expects revenue growth in the range of 12-16% at CER. Insulet’s total Omnipod revenue growth is expected in the range of 15-20% at CER. Meanwhile, the company Drug Delivery revenues are expected in the range of a fall of 35-30% at CER.
For the first quarter of 2022, Insulet projects revenue growth of 13-16% at CER. Total Omnipod revenues are likely to grow 13-16% at CER. However, Drug Delivery revenues are expected in the range of 20-25%.
Downsides
Economic Uncertainty Hampers Growth: Weaker global economic conditions may reduce demand for Insulet’s products, intensify competition, exert pressure on prices, dent supply and lengthen the sales cycle. Moreover, a number of countries in Western Europe are facing a liquidity crunch. Insulet is also exposed to the risk of reducing healthcare spending in the United States, Canada and Europe due to an economic slump. We are particularly cautious as growth could moderate further if the economic scenario worsens.
Image Source: Zacks Investment Research
Tough Competitive Pressure: Insulet operates in a highly competitive environment, dominated by firms ranging from large multinational corporations with significant resources to start-ups. Also, the competitive and regulatory conditions in the markets where the company operates limit Insulet’s ability to switch to strategies like price increases and other drivers of cost.
Estimate Trend
Over the past 30 days, the Zacks Consensus Estimate for Insulet’s earnings per share has been constant at $1.28
The Zacks Consensus Estimate for first-quarter 2022 revenues is pegged at $286.9 million, suggesting a 13.7% rise from the year-ago reported number.
Key Picks
A few better-ranked stocks from the broader medical space that investors can consider are AMN Healthcare Services, Inc. (AMN - Free Report) , STERIS plc (STE - Free Report) and Abiomed, Inc. .
AMN Healthcare has an estimated long-term growth rate of 16.2%. AMN Healthcare’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 20%. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AMN Healthcare has gained 36.9% against the industry’s 57.2% fall over the past year.
STERIS, carrying a Zacks Rank #2, has an estimated long-term growth rate of 11.3%. STERIS’ earnings surpassed estimates in three of the trailing four quarters, the average surprise being 6.34%.
STERIS has gained 17.1% against the industry’s 6.1% fall over the past year.
Abiomed surpassed earnings estimates in each of the trailing four quarters, the average surprise being 9.2%. Abiomed currently carries a Zacks Rank #2.
Abiomed’s long-term earnings growth rate is estimated at 20%. ABMD’s earnings yield of 1.5% compares favorably against the industry’s (6.4%).
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Here's Why You Should Hold on to Insulet (PODD) Stock For Now
Insulet Corporation (PODD - Free Report) is gaining from robust uptake of the Omnipod system. Moreover, the bullish 2022 outlook raises investor confidence in the stock. However, economic uncertainty and stiff competition raise apprehensions.
Over the past year, the Zacks Rank #3 (Hold) stock has lost 6.4% versus a 20.4% fall of the industry. The S&P 500 rose 5.5% in the said time frame.
The renowned developer, manufacturer and marketer of insulin delivery systems has a market capitalization of $18.39 billion. In the fourth quarter of 2021, the company’s earnings surpassed the Zacks Consensus Estimate by 40%.
Let’s delve deeper,
Key Drivers
Omnipod’s Market Access Expansion Continues: Insulet has achieved several milestones with respect to expanding Omnipod’s market access. In the fourth quarter, Insulet’s U.S. and international diabetes product lines achieved solid results, with total Omnipod growth of 19.3% year over year. The company registered U.S. Omnipod revenue growth of 27.7%, led by a growing customer base, Omnipod DASH adoption and ongoing mix benefit as the company shifts volume into the pharmacy channel. Omnipod DASH continues to ramp up and drove almost 80% of the U.S. new customer addition. International Omnipod revenues rose 6% at CER in the fourth quarter of 2021.
Diabetes Market Boom: An aging population, unhealthy lifestyle, rising awareness and higher expenditure on healthcare are likely to continue driving the highly competitive diabetes market. Per a report by Fortune Business Insights, the global diabetes device market size is expected to reach $33.55 billion by 2026 from $20.92 billion in 2019, at a CAGR of 6.1%.
The company noted that its international expansion will further increase its global addressable market beyond the 11 million to 12 million people living with insulin-dependent diabetes throughout the global markets.
Bullish Guidance: Insulet has initiated its financial outlook for first-quarter 2022 and full-year 2022.
For 2022, the company expects revenue growth in the range of 12-16% at CER. Insulet’s total Omnipod revenue growth is expected in the range of 15-20% at CER. Meanwhile, the company Drug Delivery revenues are expected in the range of a fall of 35-30% at CER.
For the first quarter of 2022, Insulet projects revenue growth of 13-16% at CER. Total Omnipod revenues are likely to grow 13-16% at CER. However, Drug Delivery revenues are expected in the range of 20-25%.
Downsides
Economic Uncertainty Hampers Growth: Weaker global economic conditions may reduce demand for Insulet’s products, intensify competition, exert pressure on prices, dent supply and lengthen the sales cycle. Moreover, a number of countries in Western Europe are facing a liquidity crunch. Insulet is also exposed to the risk of reducing healthcare spending in the United States, Canada and Europe due to an economic slump. We are particularly cautious as growth could moderate further if the economic scenario worsens.
Tough Competitive Pressure: Insulet operates in a highly competitive environment, dominated by firms ranging from large multinational corporations with significant resources to start-ups. Also, the competitive and regulatory conditions in the markets where the company operates limit Insulet’s ability to switch to strategies like price increases and other drivers of cost.
Estimate Trend
Over the past 30 days, the Zacks Consensus Estimate for Insulet’s earnings per share has been constant at $1.28
The Zacks Consensus Estimate for first-quarter 2022 revenues is pegged at $286.9 million, suggesting a 13.7% rise from the year-ago reported number.
Key Picks
A few better-ranked stocks from the broader medical space that investors can consider are AMN Healthcare Services, Inc. (AMN - Free Report) , STERIS plc (STE - Free Report) and Abiomed, Inc. .
AMN Healthcare has an estimated long-term growth rate of 16.2%. AMN Healthcare’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 20%. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AMN Healthcare has gained 36.9% against the industry’s 57.2% fall over the past year.
STERIS, carrying a Zacks Rank #2, has an estimated long-term growth rate of 11.3%. STERIS’ earnings surpassed estimates in three of the trailing four quarters, the average surprise being 6.34%.
STERIS has gained 17.1% against the industry’s 6.1% fall over the past year.
Abiomed surpassed earnings estimates in each of the trailing four quarters, the average surprise being 9.2%. Abiomed currently carries a Zacks Rank #2.
Abiomed’s long-term earnings growth rate is estimated at 20%. ABMD’s earnings yield of 1.5% compares favorably against the industry’s (6.4%).