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New Launches Support Tandem Diabetes Stock Despite Macro Concerns
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Tandem Diabetes (TNDM - Free Report) is gaining from continued product innovations. Yet, rising costs put pressure on margins. The stock carries a Zacks Rank #3 (Hold).
Tandem Diabetes is driving transformative innovation to help reduce the burden and create new possibilities for people living with diabetes. During the second quarter, its flagship t:slim X2 insulin pump software became compatible with Dexcom G7. It was already compatible with Dexcom G6 Continuous Glucose Monitoring (CGM) systems. Following this development, t:slim X2 was approved for sale by Canada Health. In 2023, it was launched in the United States.
t:slim X2 became the first automated insulin delivery (AID) system to integrate with Abbott’s new FreeStyle Libre 2 Plus sensor in 2023. The breakthrough development has enabled t:slim X2 users in the United States to benefit from a hybrid closed-loop system that helps predict and prevent high and low blood sugar levels. Within the digital health platforms segment, the company began the launch of Tandem Source outside the United States.
The latest addition to the pump platform portfolio, Tandem Mobi, is leading the way in creating a whole new category of devices for insulin therapy. In May 2024, the Tandem Mobi insulin pump with Control-IQ technology completed integration with both Dexcom G7 and Dexcom G6 CGM Systems. With this, Tandem Diabetes became the only company that offers two insulin pump options that connect with both Dexcom G6 and Dexcom G7, providing more choices in terms of diabetes management. Mobi received an overwhelmingly positive response from its early users and was commercially launched in the United States in February this year.
Tandem Diabetes seeks to grow its business through the acquisitions of products or technologies or investments in businesses. Last year, it acquired Switzerland-based AMF Medical SA — the developer of the Sigi Patch Pump. The company’s speed-to-market with CGM integrations gives it a competitive advantage as its CGM partners advance and drive the adoption of sensor technology. This is evident from G7 and G6, Dexcom’s CGM systems that Tandem Diabetes has integrated with its pump technology, along with Abbott’s latest CGM innovation.
What's Weighing on Tandem Diabetes?
Tandem Diabetes operates in a highly competitive environment dominated by firms ranging from large multinational corporations with significant resources to start-ups. The company’s primary competitors are major medical device companies that are publicly traded or divisions or subsidiaries of publicly traded companies, including Insulet and Medtronic.
Also, the competitive and regulatory conditions in the markets where the company operates limit its ability to switch to strategies like price increases. In addition, several companies have been developing and marketing their own insulin delivery systems and related software applications, including insulin pumps and Bluetooth-enabled insulin pens, to support MDI therapy. These significant changes within the industry may affect the company’s business and operating results.
Further, the uncertainties related to the current global economic and political conditions are posing challenges for the company, leading to difficulties in accurately predicting the demand for its products. Many of the jurisdictions in which Tandem Diabetes sells its products have experienced unfavorable economic conditions, such as a slowdown due to political instability, military hostilities and financial uncertainties, among others.
Consumers also tend to modify spending priorities and reduce discretionary spending under difficult macroeconomic conditions by delaying purchases. These have also disrupted the company’s relationship with suppliers, third-party manufacturers, healthcare providers and distributors. This could reduce Tandem Diabetes’ profitability and negatively affect its overall financial performance. In the second quarter of 2024, cost of sales increased 15.9% from the prior-year level.
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New Launches Support Tandem Diabetes Stock Despite Macro Concerns
Tandem Diabetes (TNDM - Free Report) is gaining from continued product innovations. Yet, rising costs put pressure on margins. The stock carries a Zacks Rank #3 (Hold).
Tandem Diabetes is driving transformative innovation to help reduce the burden and create new possibilities for people living with diabetes. During the second quarter, its flagship t:slim X2 insulin pump software became compatible with Dexcom G7. It was already compatible with Dexcom G6 Continuous Glucose Monitoring (CGM) systems. Following this development, t:slim X2 was approved for sale by Canada Health. In 2023, it was launched in the United States.
t:slim X2 became the first automated insulin delivery (AID) system to integrate with Abbott’s new FreeStyle Libre 2 Plus sensor in 2023. The breakthrough development has enabled t:slim X2 users in the United States to benefit from a hybrid closed-loop system that helps predict and prevent high and low blood sugar levels. Within the digital health platforms segment, the company began the launch of Tandem Source outside the United States.
The latest addition to the pump platform portfolio, Tandem Mobi, is leading the way in creating a whole new category of devices for insulin therapy. In May 2024, the Tandem Mobi insulin pump with Control-IQ technology completed integration with both Dexcom G7 and Dexcom G6 CGM Systems. With this, Tandem Diabetes became the only company that offers two insulin pump options that connect with both Dexcom G6 and Dexcom G7, providing more choices in terms of diabetes management. Mobi received an overwhelmingly positive response from its early users and was commercially launched in the United States in February this year.
Tandem Diabetes Care, Inc. Price
Tandem Diabetes Care, Inc. price | Tandem Diabetes Care, Inc. Quote
Tandem Diabetes seeks to grow its business through the acquisitions of products or technologies or investments in businesses. Last year, it acquired Switzerland-based AMF Medical SA — the developer of the Sigi Patch Pump. The company’s speed-to-market with CGM integrations gives it a competitive advantage as its CGM partners advance and drive the adoption of sensor technology. This is evident from G7 and G6, Dexcom’s CGM systems that Tandem Diabetes has integrated with its pump technology, along with Abbott’s latest CGM innovation.
What's Weighing on Tandem Diabetes?
Tandem Diabetes operates in a highly competitive environment dominated by firms ranging from large multinational corporations with significant resources to start-ups. The company’s primary competitors are major medical device companies that are publicly traded or divisions or subsidiaries of publicly traded companies, including Insulet and Medtronic.
Also, the competitive and regulatory conditions in the markets where the company operates limit its ability to switch to strategies like price increases. In addition, several companies have been developing and marketing their own insulin delivery systems and related software applications, including insulin pumps and Bluetooth-enabled insulin pens, to support MDI therapy. These significant changes within the industry may affect the company’s business and operating results.
Further, the uncertainties related to the current global economic and political conditions are posing challenges for the company, leading to difficulties in accurately predicting the demand for its products. Many of the jurisdictions in which Tandem Diabetes sells its products have experienced unfavorable economic conditions, such as a slowdown due to political instability, military hostilities and financial uncertainties, among others.
Consumers also tend to modify spending priorities and reduce discretionary spending under difficult macroeconomic conditions by delaying purchases. These have also disrupted the company’s relationship with suppliers, third-party manufacturers, healthcare providers and distributors. This could reduce Tandem Diabetes’ profitability and negatively affect its overall financial performance. In the second quarter of 2024, cost of sales increased 15.9% from the prior-year level.
Key Picks
Some better-ranked stocks in the broader medical space are Intuitive Surgical (ISRG - Free Report) , TransMedics Group (TMDX - Free Report) and Boston Scientific (BSX - Free Report) . While Intuitive Surgical and TransMedics sport a Zacks Rank #1 (Strong Buy) each, Boston Scientific currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical’s shares have surged 52.9% in the past year. Estimates for the company’s earnings have remained constant at $6.67 per share for 2024 in the past 30 days.
ISRG’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 8.97%. In the last reported quarter, it posted an earnings surprise of 16.34%.
Estimates for TransMedics’ 2024 earnings per share (EPS) have moved up 48.1% to $1.20 in the past 30 days. Shares of the company have risen 155% in the past year compared with the industry’s 8.6% growth.
TMDX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 287.50%. In the last reported quarter, it delivered an earnings surprise of 66.67%.
Estimates for Boston Scientific’s 2024 EPS have increased 1.7% to $2.40 in the past 30 days. In the past year, shares of BSX have risen 48.6% compared with the industry’s 12.5% growth.
In the last reported quarter, BSX delivered an earnings surprise of 6.90%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.18%.