A month has gone by since the last earnings report for Insulet (PODD - Free Report) . Shares have lost about 6.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Insulet 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.
Insulet Gains From Direct European Operations in Q3
Insulet reported earnings per share (EPS) of 3 cents in third-quarter 2018 against net loss of 4 cents a year ago. The figure also surpassed the Zacks Consensus Estimate of 2 cents by 50%.
Revenues in Detail
Revenues in the third quarter totaled $151.1 million, beating the Zacks Consensus Estimate by 1.7%. Moreover, the top line improved 24.1% from the year-ago quarter.
Per management, the company’s direct European operations, progress in market access initiatives, build out of the U.S. manufacturing facility and the limited commercial launch of the Omnipod DASH system drove the upside in revenues. An expanding global customer base also played a role.
Insulet reported U.S. Omnipod revenues of $82 million, reflecting an increase of 17% year over year.
International Omnipod revenues of $50.2 million rose 55%.
Revenues at the Drug Delivery business totaled $18.9 million, down 2% year over year.
Gross profit in the reported quarter grossed $102 million, up 38.6% from the prior-year quarter. Gross margin came in at 67.5%, up 700 basis points (bps) on continuous improvement in manufacturing and supply chain operations. Furthermore, successful transition to direct operations in Europe led to an added benefit of 400 bps to the gross margin.
Total operating expenses came in at $95.1 million compared with $71.6 million in the prior-year quarter. Operating income in the reported quarter was $6.9 million, up from $2 million in the year-earlier quarter.
For 2018, the company raised the low end of its revenue guidance to a range of $558-$563 million from $547-$562 million expected earlier, reflecting growth of around 20-21% from $463.8 million reported in 2017. The Zacks Consensus Estimate for revenues is pegged at $557.3 million, below the guided range.
For the fourth quarter of 2018, Insulet expects revenues in the band of $159-164 million, reflecting growth of approximately 22-26% compared with $130.5 million in the year-ago quarter. The Zacks Consensus Estimate for the metric is pegged at $155 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 67.08% due to these changes.
At this time, Insulet has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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.
Insulet has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.