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Tandem Diabetes (TNDM) Posts Wider Q4 Loss, Gross Margin Down
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Tandem Diabetes Care, Inc. (TNDM - Free Report) reported an adjusted loss of 27 cents per share for the fourth quarter of 2023, wider than the adjusted loss of 1 cent per share in the year-ago period. The figure also missed the Zacks Consensus Estimate of a loss of 23 cents.
On a GAAP basis, the loss was 46 cents per share in the fourth quarter compared with the year-ago period’s loss of 25 cents.
Revenues
GAAP revenues in the quarter came in at $196.8 million, down 10.8% year over year and missed the Zacks Consensus Estimate by 3.9%.
In September 2022, the company began offering the Tandem Choice Program to eligible t:slim X2 customers to provide a pathway to the ownership of its newest hardware platform, Tandem Mobi, when available. Based on that, Tandem Diabetes is now reporting adjusted revenues as well.
Non-GAAP revenues were $209.3 million in the reported quarter on 27,000 pump shipments worldwide.
Quarter in Detail
Tandem Diabetes reports under two primary markets based on the geographic location to which its products are shipped.
The United States
Total sales in this region came in at $150.9 million in the fourth quarter on a GAAP basis, down 7.7% year over year. Non-GAAP sales in the United States were $163.5 million. The company shipped 21,000 pumps in the fourth quarter, lower than the 24,000 shipments in the year-ago period.
Tandem Diabetes Care, Inc. Price, Consensus and EPS Surprise
In the fourth quarter, the company registered GAAP sales of $45.9 million (same on a non-GAAP basis), a 16.1% decline from the year-ago period.
Margin Details
The gross profit in the fourth quarter was $93.3 million, a 19.2% decline year over year. The gross margin contracted 498 basis points to 47.4%, despite a 1.4% decline in the cost of sales to $103.5 million.
SG&A expenses fell 12.2% to $85.8 million in the quarter under review. R&D expenses increased 19.7% to $42.6 million.
The company registered an adjusted operating loss of $35.1 million in the fourth quarter compared with the year-ago operating loss of $17.8 million.
Financial Position
Tandem Diabetes exited the fourth quarter of 2023 with cash and cash equivalents and short-term investments of $467.9 million compared with $616.9 million at the end of the fourth quarter of 2022.
2024 Guidance
Tandem Diabetes initiated its financial outlook for 2024.
For the full year, non-GAAP sales are estimated to be approximately $850 million. The Zacks Consensus Estimate for full-year 2024 revenues is pegged at $846 million.
Full-year non-GAAP sales inside the United States are expected to be nearly $625 million and sales outside the United States to be nearly $225 million.
For the first quarter of 2024, the company anticipates to generate non-GAAP sales of approximately $175 million. Within this, sales inside the United States are expected to be $122 million and $53 million outside the United States. The Zacks Consensus Estimate for first-quarter 2024 revenues is pegged at $189.1 million.
Our Take
Tandem Diabetes exited the fourth quarter of 2023 with wider-than-expected loss and also missed revenue estimates. The company’s sales outside the United States were pressured due to a number of unique one-time events, such as the transition to the European distribution center, as well as the more recent change in the French reimbursement structure. Operating loss in the quarter came out much higher, which is discouraging.
Meanwhile, Tandem Diabetes executed multiple strategic initiatives, including the launch of its new diabetes management platform, Tandem Source, for customers and healthcare providers in the United States. The company also debuted its highly anticipated t:slim X2 insulin pump software integrated with Dexcom G7 Continuous Glucose Monitoring technology. TNDM is advancing its future product portfolio, centering its pump platforms, t:slim, Mobi and Sigi, which is encouraging.
Zacks Rank and Key Picks
Tandem Diabetes currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader medical space are Stryker Corporation (SYK - Free Report) , Cencora, Inc. (COR - Free Report) and Cardinal Health (CAH - Free Report) .
Stryker, carrying a Zacks Rank #2 (Buy) at present, reported a fourth-quarter 2023 adjusted EPS of $3.46, beating the Zacks Consensus Estimate by 5.8%. Revenues of $5.8 billion outpaced the consensus estimate by 3.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stryker has an estimated earnings growth rate of 11.5% for 2025 compared with the S&P 500’s 9.9%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 5.1%.
Cencora, carrying a Zacks Rank #2 at present, reported a first-quarter fiscal 2024 adjusted EPS of $3.28, which beat the Zacks Consensus Estimate by 14.7%. Revenues of $72.3 billion outpaced the Zacks Consensus Estimate by 5.1%.
COR has an earnings yield of 5.75% compared with the industry’s 1.85%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 6.7%.
Cardinal Health reported second-quarter fiscal 2024 adjusted earnings of $1.82, which beat the Zacks Consensus Estimate by 16.7%. Revenues of $57.45 billion improved 11.6% on a year-over-year basis and also topped the Zacks Consensus Estimate by 1.1%.
CAH has a long-term estimated earnings growth rate of 15.3% compared with the industry’s 11.8% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 15.6%.
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Tandem Diabetes (TNDM) Posts Wider Q4 Loss, Gross Margin Down
Tandem Diabetes Care, Inc. (TNDM - Free Report) reported an adjusted loss of 27 cents per share for the fourth quarter of 2023, wider than the adjusted loss of 1 cent per share in the year-ago period. The figure also missed the Zacks Consensus Estimate of a loss of 23 cents.
On a GAAP basis, the loss was 46 cents per share in the fourth quarter compared with the year-ago period’s loss of 25 cents.
Revenues
GAAP revenues in the quarter came in at $196.8 million, down 10.8% year over year and missed the Zacks Consensus Estimate by 3.9%.
In September 2022, the company began offering the Tandem Choice Program to eligible t:slim X2 customers to provide a pathway to the ownership of its newest hardware platform, Tandem Mobi, when available. Based on that, Tandem Diabetes is now reporting adjusted revenues as well.
Non-GAAP revenues were $209.3 million in the reported quarter on 27,000 pump shipments worldwide.
Quarter in Detail
Tandem Diabetes reports under two primary markets based on the geographic location to which its products are shipped.
The United States
Total sales in this region came in at $150.9 million in the fourth quarter on a GAAP basis, down 7.7% year over year. Non-GAAP sales in the United States were $163.5 million. The company shipped 21,000 pumps in the fourth quarter, lower than the 24,000 shipments in the year-ago period.
Tandem Diabetes Care, Inc. Price, Consensus and EPS Surprise
Tandem Diabetes Care, Inc. price-consensus-eps-surprise-chart | Tandem Diabetes Care, Inc. Quote
Outside the United States
In the fourth quarter, the company registered GAAP sales of $45.9 million (same on a non-GAAP basis), a 16.1% decline from the year-ago period.
Margin Details
The gross profit in the fourth quarter was $93.3 million, a 19.2% decline year over year. The gross margin contracted 498 basis points to 47.4%, despite a 1.4% decline in the cost of sales to $103.5 million.
SG&A expenses fell 12.2% to $85.8 million in the quarter under review. R&D expenses increased 19.7% to $42.6 million.
The company registered an adjusted operating loss of $35.1 million in the fourth quarter compared with the year-ago operating loss of $17.8 million.
Financial Position
Tandem Diabetes exited the fourth quarter of 2023 with cash and cash equivalents and short-term investments of $467.9 million compared with $616.9 million at the end of the fourth quarter of 2022.
2024 Guidance
Tandem Diabetes initiated its financial outlook for 2024.
For the full year, non-GAAP sales are estimated to be approximately $850 million. The Zacks Consensus Estimate for full-year 2024 revenues is pegged at $846 million.
Full-year non-GAAP sales inside the United States are expected to be nearly $625 million and sales outside the United States to be nearly $225 million.
For the first quarter of 2024, the company anticipates to generate non-GAAP sales of approximately $175 million. Within this, sales inside the United States are expected to be $122 million and $53 million outside the United States. The Zacks Consensus Estimate for first-quarter 2024 revenues is pegged at $189.1 million.
Our Take
Tandem Diabetes exited the fourth quarter of 2023 with wider-than-expected loss and also missed revenue estimates. The company’s sales outside the United States were pressured due to a number of unique one-time events, such as the transition to the European distribution center, as well as the more recent change in the French reimbursement structure. Operating loss in the quarter came out much higher, which is discouraging.
Meanwhile, Tandem Diabetes executed multiple strategic initiatives, including the launch of its new diabetes management platform, Tandem Source, for customers and healthcare providers in the United States. The company also debuted its highly anticipated t:slim X2 insulin pump software integrated with Dexcom G7 Continuous Glucose Monitoring technology. TNDM is advancing its future product portfolio, centering its pump platforms, t:slim, Mobi and Sigi, which is encouraging.
Zacks Rank and Key Picks
Tandem Diabetes currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader medical space are Stryker Corporation (SYK - Free Report) , Cencora, Inc. (COR - Free Report) and Cardinal Health (CAH - Free Report) .
Stryker, carrying a Zacks Rank #2 (Buy) at present, reported a fourth-quarter 2023 adjusted EPS of $3.46, beating the Zacks Consensus Estimate by 5.8%. Revenues of $5.8 billion outpaced the consensus estimate by 3.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stryker has an estimated earnings growth rate of 11.5% for 2025 compared with the S&P 500’s 9.9%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 5.1%.
Cencora, carrying a Zacks Rank #2 at present, reported a first-quarter fiscal 2024 adjusted EPS of $3.28, which beat the Zacks Consensus Estimate by 14.7%. Revenues of $72.3 billion outpaced the Zacks Consensus Estimate by 5.1%.
COR has an earnings yield of 5.75% compared with the industry’s 1.85%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 6.7%.
Cardinal Health reported second-quarter fiscal 2024 adjusted earnings of $1.82, which beat the Zacks Consensus Estimate by 16.7%. Revenues of $57.45 billion improved 11.6% on a year-over-year basis and also topped the Zacks Consensus Estimate by 1.1%.
CAH has a long-term estimated earnings growth rate of 15.3% compared with the industry’s 11.8% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 15.6%.