Tandem Diabetes Care, Inc. (TNDM) Down 13.2% Since Final Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for Tandem Diabetes Care, Inc. (TNDM). The stocks lost about 13.2% over the period, trailing the S&P 500.

Will the recent negative trend continue until the next earnings release, or is Tandem Diabetes Care, Inc. about to break out? Before we dive into the recent reaction from investors and analysts, let’s take a quick look at the latest earnings report to get a better handle on the key drivers.

Tandem diabetes beat Q4 results, gross margin falls

Tandem diabetes adjusted earnings per share of 24 cents for the fourth quarter of 2020 saw a staggering 500% increase over the previous year’s figure of 4 cents. Additionally, adjusted EPS for the quarter beat Zacks consensus estimate by 84.6%.

GAAP earnings per share were 22 cents per share, 450% higher than the previous year.

The GAAP loss per share for the full year was 56 cents, higher than the previous year’s loss of 42 cents per share.

revenues

Revenue for the quarter was $ 168.1 million, beating Zacks consensus estimate by 19.1%. Despite the pressure to sell due to COVID-19, sales increased 55% year over year. The company’s robust adoption of Control-IQ technology significantly increased return on sales for the quarter.

Total annual revenue was $ 498.8 million, an increase of 37.7% over the same period last year. The metric again beat the Zacks consensus estimate by 5.7%.

Q4 in detail

Tandem Diabetes reported international sales of $ 28.7 million for the quarter, an increase of 182% over the fourth quarter of 2019. Domestic sales were $ 139.3 million, 42% higher than the prior year.

International pump shipments rose by 278% to 8,133 pumps. Domestic pump deliveries increased by 41% to 24,552 units compared to the previous year.

The company believes the surge in pump shipments is due to the continued momentum of its Control-IQ technology.

Margins

Gross profit at the end of December was $ 90.6 million, up 50.2% year over year. However, the gross margin was 53.9%, which is a decrease of 172 basis points (basis points).

Selling, general, and administrative expenses increased 19.7% to $ 54.5 million for the quarter. Research and development expenses also increased 38.3% to $ 17.4 million.

Total operating profit was $ 18.7 million, 770.4% higher than the prior year. The operating margin rose year-on-year by 913 basis points to 11.1%.

The story goes on

Financial position

Tandem Diabetes closed in 2020 with cash and short-term investments of $ 484.9 million compared to $ 176.5 million in late 2019.

2021 instructions

Due to the strong global demand for t: slim X2 insulin pumps, Tandem Diabetes has published its financial forecast for the year 2021.

For the year, sales are estimated to be between $ 600 million and $ 615 million, an annual growth rate of 20 to 23% over 2020. The Zacks consensus estimate for 2021 sales is set at $ 564.3 million.

The full year revenue outlook includes international revenue of $ 105 million to $ 110 million.

How have the estimates moved since then?

Over the past month, investors have seen an upward trend in their estimates review. The consensus estimate shifted 25.64% due to these changes.

VGM scores

At this point, Tandem Diabetes Care, Inc. is showing a strong growth value of A, although it lags a bit behind with a B on the momentum score. However, the share was assigned a grade of D on the value side in the lower 40% for this investment strategy.

Overall, the stock has an aggregated VGM value of B. Unless your focus is on one strategy, that value is the one you should be interested in.

outlook

Estimates for the stock are generally sloping up, and the extent of these revisions looks encouraging. In particular, Tandem Diabetes Care, Inc. has a Zacks Rank 3 (Hold). We expect the stock to generate inline returns over the next several months.

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