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Why Is Tandem Diabetes Care, Inc. (TNDM) Down 16.3% 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 lost about 16.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Tandem Diabetes Care, Inc. due for a breakout? 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 Earnings Lag Estimates, Sales View Up

Tandem Diabetes Care, Inc.’s reported GAAP loss per share of 23 cents for the first quarter of 2022 was wider than the loss of 8 cents per share in the year-ago period. This figure also compared unfavorably with the Zacks Consensus Estimate of break-even earnings.

Revenues

Revenues in the quarter came in at $175.9 million, up 24.7% year over year and beating the Zacks Consensus Estimate by 4.4%. The strength in the top line was driven by growth in the company’s installed base and robust pump shipments, both in and outside the United States.

Quarter in Detail

Tandem Diabetes registered sales of $44.6 million outside the United States in the quarter under review, recording a 18.4% rise from first-quarter 2021. Total sales in the United States came in at $131.3 million, up 27% year over year.

Pump shipments outside the United States surged 8.4% to 9,437 pumps. Meanwhile, U.S. pump shipments jumped 12.1% year over year to 18,658 units.

The surge in pump shipments outside the United States resulted from a remarkable growth in the number of customers compared to the year-ago period. Meanwhile, pump shipments within the United States benefitted from increasing new and renewal customers.

Margins

Gross profit in the first quarter was $91.1 million, marking 24.3% year-over-year growth. Gross margin was 51.8%, indicating a contraction of 18 basis points (bps).

Selling, general and administrative expenses rose 25.1% to $73.3 million in the quarter under review. Research and development expenses also increased 84.6% to $33.2 million.

The company registered an operating loss of $15.3 million in the first quarter.

Financial Position

Tandem Diabetes exited the first quarter of 2022 with cash and cash equivalents, and short-term investments of $635.4 million compared with $623.8 million recorded at the end of 2021.

2022 Guidance

Tandem Diabetes has updated its financial guidance for 2022.

For the year, sales are projected in the range of $850-$865 million (up from the prior projection of $845-$860 million), indicating annual sales growth of 21% to 23%. The Zacks Consensus Estimate for 2022 revenues is pegged at $851.24 million.

Full-year sales guidance for the United States is in the range of $635-$645 million (up from the prior estimated $630-$640 million).

The company has maintained its full-year sales guidance for outside the United States at the band of $215-$220 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

The consensus estimate has shifted -55.36% due to these changes.

VGM Scores

Currently, Tandem Diabetes Care, Inc. has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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 indicates a downward shift. 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.

Performance of an Industry Player

Tandem Diabetes Care, Inc. is part of the Zacks Medical - Instruments industry. Over the past month, Thermo Fisher Scientific (TMO - Free Report) , a stock from the same industry, has gained 3.6%. The company reported its results for the quarter ended March 2022 more than a month ago.

Thermo Fisher reported revenues of $11.82 billion in the last reported quarter, representing a year-over-year change of +19.3%. EPS of $7.25 for the same period compares with $7.21 a year ago.

Thermo Fisher is expected to post earnings of $4.93 per share for the current quarter, representing a year-over-year change of -12%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.1%.

Thermo Fisher has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.


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