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Insulet (PODD) Up 27.8% Since Last Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for Insulet (PODD - Free Report) . Shares have added about 27.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Insulet due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Insulet Beats Earnings and Revenue Estimates in Q1

Insulet reported earnings per share (EPS) of 7 cents in first-quarter 2019 against a net loss of 11 cents posted in the prior-year quarter. The figure also surpassed the Zacks Consensus Estimate of earnings of 2 cents by a massive 250%.

Revenues in Detail

Revenues in the first quarter totaled $159.6 million, beating the Zacks Consensus Estimate by 3.4%. Moreover, the top line improved 29% from the year-ago quarter’s reported figure.

Insulet reported first-quarter 2019 U.S. Omnipod revenues of $86.1 million, reflecting an increase of 23% year over year. 

International Omnipod revenues of $56.9 million surged 48%.

The Drug Delivery business’ revenues totaled $16.6 million, up 11% year over year.

Margins

Gross profit in the reported quarter was $10.6 million, up 40.7% from the prior-year quarter. Gross margin came in at 66.9%, expanding 552 basis points (bps) on continued improvement in manufacturing and supply-chain operations.

Total operating expenses came in at $99.4 million compared with $75.8 million witnessed in the prior-year quarter. Operating margin came in at 4.6% in the first quarter, indicating an expansion of 455 bps.

2019 Guidance

For 2019, the company has raised its revenue expectation to the range of $667-$690 million compared to prior estimate of $662-687 million. This suggests growth of roughly 18-22% from 2018. The Zacks Consensus Estimate for revenues is pegged at $677.4 million, within the guided range.

For the second quarter of 2019, Insulet expects revenues in the band of $160-165 million, reflecting growth of approximately 29-33% from the year-ago quarter. The Zacks Consensus Estimate for the metric is pegged at $162.6 million, within 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 71.72% due to these changes.

VGM Scores

Currently, Insulet has a strong Growth Score of A, a grade with the same score on the momentum front. 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.

Outlook

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


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