© Reuters. Forget about Senseonics, buy these 3 diabetes stocks instead
While the shares of Senseonics (SENS) have rallied in recent months, mainly due to the interest of the Reddit crowd, the share now appears extremely overvalued at its current price level. We therefore believe that it is better to bet on stocks of Eli Lilly (LLY), Abbott (ABT) and Novo Nordisk (NYSE :), which are dominant players in the diabetes care market and have tremendous growth potential. So let’s take a closer look at these names. Shares of continuous glucose monitoring system (CGM) manufacturer Senseonics Holdings, Inc. (NYSE 🙂 are up 254.6% in the last six months and 680% in the last nine months, closing yesterday’s trading session at 3, $ 12. Profits were primarily driven by interest from r / wallstreetbets subreddit and investor optimism about the announcement of positive clinical results from the PROMISE study.
However, Wall Street analysts expect the stock to hit $ 0.88 in the near future, indicating a possible 71.8% decline. That expectation is justified as the sky-high valuation is inconsistent with the dire growth outlook. In terms of Forward EV / S and P / S, SENS is currently trading at 96.43x and 96.95x, respectively, which is much higher than the industry averages of 7.10x and 7.86x. The EPS is expected to remain negative in 2021 and 2022. So we think it’s advisable to avoid SENS now.
The global diabetes care market is projected to reach $ 41.71 billion by 2027, according to a report by Emergen Research. More sedentary lifestyles amid remote working conditions and an aging population have led to a significant increase in the number of diabetics. According to SingleCare, around 700 million adults are expected to develop diabetes worldwide by 2045. With this in mind, it might make sense to invest in shares of the dominant companies in the diabetes care market Eli Lilly and Company (NYSE :), Abbott Laboratories (NYSE 🙂 and Novo Nordisk A / S (NVO). With their fundamental strengths and consistent innovation, all three are well positioned to benefit from the growing demand for diabetes care solutions.
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