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Insulet (PODD) Down 0.1% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Insulet (PODD - Free Report) . Shares have lost about 0.1% 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 its most recent earnings report in order to get a better handle on the important catalysts.
Insulet Q3 Earnings, Revenues Beat Estimates
Insulet announced third-quarter 2020 earnings per share (EPS) of 17 cents compared with the Zacks Consensus Estimate of 6 cents and the year-ago earnings of a penny per share.
Revenues in the third quarter totaled $234 million, beating the Zacks Consensus Estimate by 5.8%. Moreover, the top line jumped 21.8% from the year-ago number (up 28.8% at constant exchange rate or CER).
Segment in Detail
Insulet delivered third-quarter total Omnipod revenues of $202 million, reflecting an increase of 25.6% year over year (up 19.9% at CER).
International Omnipod revenues of $79.8 million were up 12.4% at CER, exceeding the company’s expectation of 9-11% growth at CER. The revenue uptick included benefits from better-than-expected new customer starts. There was an estimated 4 million to 5 million growth in channel inventory, primarily driven by stocking shipments of Omnipod DASH.
U.S. Omnipod revenues grew 20.9% year over year to $132.3 million.
The Drug Delivery business revenues totaled $21.9 million, up 47% year over year exceeding the company’s expectation of 23-28% growth for the third quarter. This was primarily the result of Insulet partners' increased forecast related to the current environment.
Margins
Gross profit in the reported quarter was $151.8 million, up 23.3% from the prior-year quarter. Gross margin of 64.9% expanded 79 basis points (bps). According to the company, this primarily included improving performance of the company’s U.S. manufacturing, favorable revenue mix from the shift to higher volume through the pharmacy channel and favorable product line mix.
Meanwhile, selling, general & administrative expenses rose 19.3% to $89.2 million. Research and development expenses went up 23.9% year over year to $38.8 million. Operating profit totaled $23.8 million, reflecting 40% rise from the prior-year quarter. Further, operating margin in the third quarter expanded 132 bps to 10.2%.
2020 Guidance
Insulet provided an update to its earlier-stated guidance for 2020.
Overall, for the year, total revenues are expected to grow in the band of 20 at CER (an increase from 17 expected earlier). The Zacks Consensus Estimate for total revenues is pegged at $873.8 million.
Total Omnipod revenues are likely to grow 21 at CER (the previously-provided guidance was 18). U.S. Omnipod revenue growth is expected in the range of 23 (19). Further, International Omnipod revenue growth is likely to be 18 at CER (an increase from the earlier-provided 17 growth projection). Drug Delivery revenues are expected to rise in the band of 4% to 6% (earlier it was expected to decline around the mid-point of 3% to 6%).
For the fourth quarter of 2020, Insulet projects revenue growth of 7-11% at CER. The Zacks Consensus Estimate for revenues is pegged at $228.3 million.
Total Omnipod revenues are expected to grow 10-14%. Revenues in the Drug Delivery segment are expected to grow 17-23%.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -141.13% due to these changes.
VGM Scores
At this time, Insulet has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, 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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Insulet (PODD) Down 0.1% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Insulet (PODD - Free Report) . Shares have lost about 0.1% 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 its most recent earnings report in order to get a better handle on the important catalysts.
Insulet Q3 Earnings, Revenues Beat Estimates
Insulet announced third-quarter 2020 earnings per share (EPS) of 17 cents compared with the Zacks Consensus Estimate of 6 cents and the year-ago earnings of a penny per share.
Revenues in the third quarter totaled $234 million, beating the Zacks Consensus Estimate by 5.8%. Moreover, the top line jumped 21.8% from the year-ago number (up 28.8% at constant exchange rate or CER).
Segment in Detail
Insulet delivered third-quarter total Omnipod revenues of $202 million, reflecting an increase of 25.6% year over year (up 19.9% at CER).
International Omnipod revenues of $79.8 million were up 12.4% at CER, exceeding the company’s expectation of 9-11% growth at CER. The revenue uptick included benefits from better-than-expected new customer starts. There was an estimated 4 million to 5 million growth in channel inventory, primarily driven by stocking shipments of Omnipod DASH.
U.S. Omnipod revenues grew 20.9% year over year to $132.3 million.
The Drug Delivery business revenues totaled $21.9 million, up 47% year over year exceeding the company’s expectation of 23-28% growth for the third quarter. This was primarily the result of Insulet partners' increased forecast related to the current environment.
Margins
Gross profit in the reported quarter was $151.8 million, up 23.3% from the prior-year quarter. Gross margin of 64.9% expanded 79 basis points (bps). According to the company, this primarily included improving performance of the company’s U.S. manufacturing, favorable revenue mix from the shift to higher volume through the pharmacy channel and favorable product line mix.
Meanwhile, selling, general & administrative expenses rose 19.3% to $89.2 million. Research and development expenses went up 23.9% year over year to $38.8 million. Operating profit totaled $23.8 million, reflecting 40% rise from the prior-year quarter. Further, operating margin in the third quarter expanded 132 bps to 10.2%.
2020 Guidance
Insulet provided an update to its earlier-stated guidance for 2020.
Overall, for the year, total revenues are expected to grow in the band of 20 at CER (an increase from 17 expected earlier). The Zacks Consensus Estimate for total revenues is pegged at $873.8 million.
Total Omnipod revenues are likely to grow 21 at CER (the previously-provided guidance was 18). U.S. Omnipod revenue growth is expected in the range of 23 (19). Further, International Omnipod revenue growth is likely to be 18 at CER (an increase from the earlier-provided 17 growth projection). Drug Delivery revenues are expected to rise in the band of 4% to 6% (earlier it was expected to decline around the mid-point of 3% to 6%).
For the fourth quarter of 2020, Insulet projects revenue growth of 7-11% at CER. The Zacks Consensus Estimate for revenues is pegged at $228.3 million.
Total Omnipod revenues are expected to grow 10-14%. Revenues in the Drug Delivery segment are expected to grow 17-23%.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -141.13% due to these changes.
VGM Scores
At this time, Insulet has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Insulet has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.