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Insulet's (PODD) Omnipod Sales Aid, Costs Continue to Rise
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Insulet Corporation (PODD - Free Report) continues to gain on solid prospects in the diabetes market. The company is progressing well with respect to its four-pillar strategy. However, the company’s heavy reliance on the Omnipod System and a tough competitive landscape add to the woes. The stock carries a Zacks Rank #3 (Hold).
In the past year, Insulet has outperformed its industry. The stock lost 9.8% compared with the industry’s 19.4% decline.
Insulet exited the third quarter of 2022 with better-than-expected earnings and revenues. The company’s performance benefited from record quarterly U.S. and Total Omnipod new customer starts. This helped Insulet in achieving 42% year-over-year growth in the United States, the highest in a decade.
The company has been progressing well with respect to its four-pillar strategy, wherein the first two pillars include expanding access and awareness, and delivering consumer-focused innovation.
In terms of the first strategy of access and awareness, the global diabetes market is growing rapidly, with millions of people expected to be diagnosed in 2022. During the third quarter, the company saw increased uptake of Omnipod through the U.S. pharmacy channel. This included an increased contribution from Omnipod 5 and a premium for the pod, given the company provides the PDM at no charge in the pharmacy channel.
In terms of the second strategy of delivering consumer-focused innovation, Insulet’s sales and marketing teams and international expansion efforts are currently aligned with its long-term growth profile. During the quarter, Insulet expanded Omnipod 5's indication to H2 and secured the CE Mark.
The third part of Insulet’s four-pillar strategy is to grow its global addressable market. In this regard, Insulet expanded its efforts and rolled out Omnipod DASH across the international markets through targeted geographic expansion. The company did this by entering the Asia Pacific region through Australia and also expanding into Turkey. Omnipod DASH was also launched in Saudi Arabia and the United Arab Emirates. Together, these countries expand Insulet’s total addressable market by nearly 1 million.
The fourth focus area of Insulet is to drive operational excellence. Earlier in 2022, the company announced the full market release of Omnipod 5 in the United States. Following this release, Omnipod 5 is available through retail, specialty, and mail order pharmacies for anyone with a prescription and coverage in the country. In the third quarter, after only two months of its full market release, Omnipod 5 represented over 80% of U.S. new customer starts compared with more than 25% in the second quarter.
On the flip side, during the third quarter, the substantial decline in insulet’s Drug Delivery sales is discouraging. Contraction in margins does not bode well. On a year-over-year basis, the company expects gross margin to be impacted by higher costs associated with the U.S. manufacturing ramp, product line mix due to the ramp-up of Omnipod 5 and lower drug delivery revenues.
Gross profit in the reported quarter was $188.3 million, down 0.2% from the prior-year quarter. Gross margin of 55.3% contracted 132 basis points. Meanwhile, selling, general & administrative expenses rose 19.5% to $140.4 million. Research and development expenses rose 20% year over year to $45 million.
Insulet’s financial results continue to largely depend on the performance of its lead product — Omnipod System. Per the company, any adverse changes in the market acceptance of the product or worsening of the factors that negatively influence sales will dent its financials majorly.
Key Picks
A few better-ranked stocks in the broader medical space that investors can consider are ShockWave Medical, Inc. (SWAV - Free Report) , Orthofix Medical Inc. (OFIX - Free Report) and Merit Medical System (MMSI - Free Report) .
ShockWave Medical, holding a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 33.1% for 2023. The company’s earnings surpassed estimates in all the trailing four quarters, the average beat being 180.1%.
SWAV has outperformed its industry in the past year. It has gained 35% against the industry’s 32.6% decline in the past year.
Orthofix Medical, currently sporting a Zacks Rank #1 (Strong Buy), reported third-quarter 2022 adjusted EPS of 13 cents, which beat the Zacks Consensus Estimate by a stupendous 550%. Revenues of $114 million outpaced the consensus mark by 2.7%.
Orthofix Medical has an estimated next-year growth rate of 58.97%. OFIX’s earnings surpassed estimates in the trailing three quarters and missed in one, the average being 129.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Merit Medical, currently carrying a Zacks Rank of 2, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. Its earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.
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Insulet's (PODD) Omnipod Sales Aid, Costs Continue to Rise
Insulet Corporation (PODD - Free Report) continues to gain on solid prospects in the diabetes market. The company is progressing well with respect to its four-pillar strategy. However, the company’s heavy reliance on the Omnipod System and a tough competitive landscape add to the woes. The stock carries a Zacks Rank #3 (Hold).
In the past year, Insulet has outperformed its industry. The stock lost 9.8% compared with the industry’s 19.4% decline.
Insulet exited the third quarter of 2022 with better-than-expected earnings and revenues. The company’s performance benefited from record quarterly U.S. and Total Omnipod new customer starts. This helped Insulet in achieving 42% year-over-year growth in the United States, the highest in a decade.
The company has been progressing well with respect to its four-pillar strategy, wherein the first two pillars include expanding access and awareness, and delivering consumer-focused innovation.
Insulet Corporation Price
Insulet Corporation price | Insulet Corporation Quote
In terms of the first strategy of access and awareness, the global diabetes market is growing rapidly, with millions of people expected to be diagnosed in 2022. During the third quarter, the company saw increased uptake of Omnipod through the U.S. pharmacy channel. This included an increased contribution from Omnipod 5 and a premium for the pod, given the company provides the PDM at no charge in the pharmacy channel.
In terms of the second strategy of delivering consumer-focused innovation, Insulet’s sales and marketing teams and international expansion efforts are currently aligned with its long-term growth profile. During the quarter, Insulet expanded Omnipod 5's indication to H2 and secured the CE Mark.
The third part of Insulet’s four-pillar strategy is to grow its global addressable market. In this regard, Insulet expanded its efforts and rolled out Omnipod DASH across the international markets through targeted geographic expansion. The company did this by entering the Asia Pacific region through Australia and also expanding into Turkey. Omnipod DASH was also launched in Saudi Arabia and the United Arab Emirates. Together, these countries expand Insulet’s total addressable market by nearly 1 million.
The fourth focus area of Insulet is to drive operational excellence. Earlier in 2022, the company announced the full market release of Omnipod 5 in the United States. Following this release, Omnipod 5 is available through retail, specialty, and mail order pharmacies for anyone with a prescription and coverage in the country. In the third quarter, after only two months of its full market release, Omnipod 5 represented over 80% of U.S. new customer starts compared with more than 25% in the second quarter.
On the flip side, during the third quarter, the substantial decline in insulet’s Drug Delivery sales is discouraging. Contraction in margins does not bode well. On a year-over-year basis, the company expects gross margin to be impacted by higher costs associated with the U.S. manufacturing ramp, product line mix due to the ramp-up of Omnipod 5 and lower drug delivery revenues.
Gross profit in the reported quarter was $188.3 million, down 0.2% from the prior-year quarter. Gross margin of 55.3% contracted 132 basis points. Meanwhile, selling, general & administrative expenses rose 19.5% to $140.4 million. Research and development expenses rose 20% year over year to $45 million.
Insulet’s financial results continue to largely depend on the performance of its lead product — Omnipod System. Per the company, any adverse changes in the market acceptance of the product or worsening of the factors that negatively influence sales will dent its financials majorly.
Key Picks
A few better-ranked stocks in the broader medical space that investors can consider are ShockWave Medical, Inc. (SWAV - Free Report) , Orthofix Medical Inc. (OFIX - Free Report) and Merit Medical System (MMSI - Free Report) .
ShockWave Medical, holding a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 33.1% for 2023. The company’s earnings surpassed estimates in all the trailing four quarters, the average beat being 180.1%.
SWAV has outperformed its industry in the past year. It has gained 35% against the industry’s 32.6% decline in the past year.
Orthofix Medical, currently sporting a Zacks Rank #1 (Strong Buy), reported third-quarter 2022 adjusted EPS of 13 cents, which beat the Zacks Consensus Estimate by a stupendous 550%. Revenues of $114 million outpaced the consensus mark by 2.7%.
Orthofix Medical has an estimated next-year growth rate of 58.97%. OFIX’s earnings surpassed estimates in the trailing three quarters and missed in one, the average being 129.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Merit Medical, currently carrying a Zacks Rank of 2, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. Its earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.