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Tandem Diabetes (TNDM) Hits 52-Week High: What's Driving It?
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Shares of Tandem Diabetes Care (TNDM - Free Report) reached a new 52-week high of $47.88 on May 16 before closing the session marginally lower at $46.93.
In the past year, this Zacks Rank #3 (Hold) stock has gained 58.4% compared with the 9.9% growth of the industry and the S&P 500 composite’s rise of 26.4%.
Tandem Diabetes has an expected 2024 sales growth rate of 15.78%. Earnings for the year are projected to increase by 35.29% compared to the S&P 500’s 9.31%. The company delivered an average earnings surprise of 9.93% in the trailing four quarters.
Tandem Diabetes is witnessing an upward trend in its stock price, prompted by innovative new product offerings. The optimism led by the solid 2024 first-quarter performance, as well as its robust potential in the expanding diabetes market, are expected to contribute to the growth. However, an excessive reliance on insulin pumps and uncertain macroeconomic conditions are major worries for the stock.
Let’s delve deeper.
Key Growth Drivers
Impressive Product Innovation Continues: Tandem Diabetes is in a transformative phase, gearing up for the next phase of growth through its innovative portfolio. The company continues to meet key commercial milestones with the successful launch of multiple new products worldwide. During the first quarter, the miniature Tandem Mobi was made commercially available in the United States following its limited release in the 2023 Q4. Mobi is currently available with Dexcom's G6 sensor compatibility.
TNDM’s flagship t:slim X2 became the first Automated Insulin Delivery system to integrate with Abbott’s FreeStyle Libre 2 Plus sensor. Outside of the United States, the company successfully rolled out the t:slim X2 with G7 integration.
The new diabetes management platform, Tandem Source, is presently available to all Tandem pump users and their Healthcare providers in the United States, with international availability expected this year. Furthermore, the company is also preparing to enhance its top-rated Control-IQ technology, having received the FDA clearance earlier, to lower the age indication for Control-IQ to age two and above and expand its feature set with options for greater personalization.
Image Source: Zacks Investment Research
Q1 Performance: Tandem Diabetes’ first-quarter 2024 loss matched the comparable 2023 figure, while revenues increased year over year and also surpassed estimates. The robust performance was driven by demand for both the t:slim X2 insulin pump and the new Tandem Mobi, which generated a high level of activity from both new and renewal customers in the company’s typically slowest quarter. Sales outside the United States surged significantly due to a higher number of shipments, which is highly encouraging. Additionally, Tandem Diabetes’ revised sales outlook for the full year buoys optimism.
Solid Prospect Within the Booming Diabetes Market: An aging population, unhealthy lifestyle, rising awareness and higher expenditure in healthcare are likely to continue driving the highly competitive diabetes market. In the near and longer term, the company aims to strategically expand the insulin pump adoption among people with type 1 diabetes in all its markets and develop products and services to attract type 2 diabetes people who use insulin-intensive therapy. The launch of the t:slim X2 with the new CGM integration has been well-received by the diabetes community for having a choice in their therapy management.
Further, the company sees great opportunity in the Type 1 market, with more than one million people in the United States and a larger population internationally not having the benefits of insulin pump therapy. Their research shows that more than two million people with type 2 diabetes in the United States who are already insulin-dependent do not use a pump. On a positive note, Tandem Diabetes is advancing in its clinical trials to support expanding Control-IQ's indication to people living with type 2 diabetes.
Downsides
Heavy Dependence on Insulin Pumps: Tandem Diabetes generates a large portion of revenues from the sales of insulin pumps, which made up 46% of worldwide sales in 2023. Various factors, such as challenges in gaining widespread acceptance among people with insulin-dependent diabetes, their caregivers, healthcare providers and key opinion leaders, along with the absence of evidence supporting the effectiveness of its products compared to competitors, can potentially hamper the company’s business, financial condition and operating results as well.
Macroeconomic Headwinds May Affect Performance: Tandem Diabetes continues to navigate global macroeconomic challenges, such as recessionary concerns, changes in discretionary spending and higher interest rates, which have impacted its customers’ purchasing decisions and the buying patterns of distributors. These factors, along with high inflation, have disrupted the company’s relationship with suppliers, third-party manufacturers, healthcare providers, distributors and overall customers.
Hims & Hers Health, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated 2024 earnings growth rate of a staggering 263.6% compared with the industry’s 18.1%. HIMS’ earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 79.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Hims & Hers Health shares have gained 36.7% against the industry’s 24.8% decline in the past year.
High Tide, sporting a Zacks Rank #1 at present, has an estimated 2024 earnings growth rate of 100%. HITI’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 91.7%.
Shares of the company have gained 83.8% against the industry’s 0.6% decline over the past year.
Medpace, also sporting a Zacks Rank #1 at present, has an estimated 2024 earnings growth rate of 27.1% compared with the industry’s 13.8%. MEDP’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 12.8%.
Shares of MEDP have surged 88.1% compared with the industry’s 5.3% growth over the past year.
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Tandem Diabetes (TNDM) Hits 52-Week High: What's Driving It?
Shares of Tandem Diabetes Care (TNDM - Free Report) reached a new 52-week high of $47.88 on May 16 before closing the session marginally lower at $46.93.
In the past year, this Zacks Rank #3 (Hold) stock has gained 58.4% compared with the 9.9% growth of the industry and the S&P 500 composite’s rise of 26.4%.
Tandem Diabetes has an expected 2024 sales growth rate of 15.78%. Earnings for the year are projected to increase by 35.29% compared to the S&P 500’s 9.31%. The company delivered an average earnings surprise of 9.93% in the trailing four quarters.
Tandem Diabetes is witnessing an upward trend in its stock price, prompted by innovative new product offerings. The optimism led by the solid 2024 first-quarter performance, as well as its robust potential in the expanding diabetes market, are expected to contribute to the growth. However, an excessive reliance on insulin pumps and uncertain macroeconomic conditions are major worries for the stock.
Let’s delve deeper.
Key Growth Drivers
Impressive Product Innovation Continues: Tandem Diabetes is in a transformative phase, gearing up for the next phase of growth through its innovative portfolio. The company continues to meet key commercial milestones with the successful launch of multiple new products worldwide. During the first quarter, the miniature Tandem Mobi was made commercially available in the United States following its limited release in the 2023 Q4. Mobi is currently available with Dexcom's G6 sensor compatibility.
TNDM’s flagship t:slim X2 became the first Automated Insulin Delivery system to integrate with Abbott’s FreeStyle Libre 2 Plus sensor. Outside of the United States, the company successfully rolled out the t:slim X2 with G7 integration.
The new diabetes management platform, Tandem Source, is presently available to all Tandem pump users and their Healthcare providers in the United States, with international availability expected this year. Furthermore, the company is also preparing to enhance its top-rated Control-IQ technology, having received the FDA clearance earlier, to lower the age indication for Control-IQ to age two and above and expand its feature set with options for greater personalization.
Image Source: Zacks Investment Research
Q1 Performance: Tandem Diabetes’ first-quarter 2024 loss matched the comparable 2023 figure, while revenues increased year over year and also surpassed estimates. The robust performance was driven by demand for both the t:slim X2 insulin pump and the new Tandem Mobi, which generated a high level of activity from both new and renewal customers in the company’s typically slowest quarter. Sales outside the United States surged significantly due to a higher number of shipments, which is highly encouraging. Additionally, Tandem Diabetes’ revised sales outlook for the full year buoys optimism.
Solid Prospect Within the Booming Diabetes Market: An aging population, unhealthy lifestyle, rising awareness and higher expenditure in healthcare are likely to continue driving the highly competitive diabetes market. In the near and longer term, the company aims to strategically expand the insulin pump adoption among people with type 1 diabetes in all its markets and develop products and services to attract type 2 diabetes people who use insulin-intensive therapy. The launch of the t:slim X2 with the new CGM integration has been well-received by the diabetes community for having a choice in their therapy management.
Further, the company sees great opportunity in the Type 1 market, with more than one million people in the United States and a larger population internationally not having the benefits of insulin pump therapy. Their research shows that more than two million people with type 2 diabetes in the United States who are already insulin-dependent do not use a pump. On a positive note, Tandem Diabetes is advancing in its clinical trials to support expanding Control-IQ's indication to people living with type 2 diabetes.
Downsides
Heavy Dependence on Insulin Pumps: Tandem Diabetes generates a large portion of revenues from the sales of insulin pumps, which made up 46% of worldwide sales in 2023. Various factors, such as challenges in gaining widespread acceptance among people with insulin-dependent diabetes, their caregivers, healthcare providers and key opinion leaders, along with the absence of evidence supporting the effectiveness of its products compared to competitors, can potentially hamper the company’s business, financial condition and operating results as well.
Macroeconomic Headwinds May Affect Performance: Tandem Diabetes continues to navigate global macroeconomic challenges, such as recessionary concerns, changes in discretionary spending and higher interest rates, which have impacted its customers’ purchasing decisions and the buying patterns of distributors. These factors, along with high inflation, have disrupted the company’s relationship with suppliers, third-party manufacturers, healthcare providers, distributors and overall customers.
Key Picks
Some better-ranked stocks in the broader medical space are Hims & Hers Health (CAH - Free Report) , High Tide (HITI - Free Report) and Medpace (MEDP - Free Report) .
Hims & Hers Health, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated 2024 earnings growth rate of a staggering 263.6% compared with the industry’s 18.1%. HIMS’ earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 79.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Hims & Hers Health shares have gained 36.7% against the industry’s 24.8% decline in the past year.
High Tide, sporting a Zacks Rank #1 at present, has an estimated 2024 earnings growth rate of 100%. HITI’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 91.7%.
Shares of the company have gained 83.8% against the industry’s 0.6% decline over the past year.
Medpace, also sporting a Zacks Rank #1 at present, has an estimated 2024 earnings growth rate of 27.1% compared with the industry’s 13.8%. MEDP’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 12.8%.
Shares of MEDP have surged 88.1% compared with the industry’s 5.3% growth over the past year.