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Why Is Tandem Diabetes (TNDM) Down 9.4% Since Last Earnings Report?

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A month has gone by since the last earnings report for Tandem Diabetes (TNDM - Free Report) . Shares have lost about 9.4% 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 due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Tandem Diabetes reported loss per share of 62 cents in third-quarter 2018 compared with net loss of $3.09 a year ago.

The company’s adjusted loss was 30 cents a share. The Zacks Consensus Estimate was pegged at a loss of 34 cents.

Revenues in Detail

Revenues in the quarter totaled $46.3 million, beating the Zacks Consensus Estimate by 12.9%. The top line improved 71.5% from the year-ago quarter.

Per management, launch of the t:slim X2 with Basal-IQ technology, increased supply capacity and renewal sales strengthening the company’s core business along with the international launch drove the upside in revenues.

Tandem Diabetes’ pump shipments rose 118% year-over-year to 8,434 pumps from 3,868.

Interestingly, the company had begun shipping pumps to select geographies for commencing international operations in August 2018. As a result, of the 8,434 pumps shipped, 1,055 pumps were shipped to locations outside the United States. Accordingly, Tandem Diabetes recorded international sales of $2.5 million in the third quarter.

Margins

Gross profit in the reported quarter grossed $21.8 million, up 83.2% from the prior-year quarter. Gross margin came in at 47.1%, up 300 basis points (bps) on benefits from increased production volumes to meet growing demand and a significant contribution from sales of high-margin pumps.

Total operating expenses came in at $37.5 million compared with $25 million in the prior-year quarter. Operating loss in the reported quarter was $15.7 million, compared with operating loss of $13.2 million a year ago.

Guidance Revised

For 2018, the company raised its revenue guidance to a range of $160-$165 million from $150-$158 million, reflecting annual sales growth of around 49-53% from 2017. The Zacks Consensus Estimate for revenues is pegged at $155.7 million, below the guided range.
 

How Have Estimates Been Moving Since Then?

Fresh estimates followed an upward path over the past two months. The consensus estimate has shifted 17.15% due to these changes.

VGM Scores

At this time, Tandem Diabetes has a great Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Tandem Diabetes has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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