Tandem Diabetes Care (NASDAQ:TNDM) designs and markets state-of-the-art insulin pumps and infusion sets. Despite its recent lackluster Q4 results, market sentiment remains positive, as the company’s strategic focus on product innovation, coupled with its ambitious sales forecast for 2024, holds strong potential for a financial turnaround. The stock has risen 43% in the past three months and Wall Street’s average price target indicates further upside.
Innovation at the Core
Tandem Diabetes Care is a medical device manufacturer known for its innovation in diabetes care solutions. This San Diego-based firm specializes in durable insulin pumps and disposable infusion sets.
As part of its growth strategy, Tandem emphasizes the consistent development of new technologies that cater to the evolving needs of diabetes patients.
In its latest stride towards technological expansion, the company introduced two new products in the U.S. market – the Tandem Mobi Automated Insulin Delivery (AID) System, which is currently regarded as the smallest and most durable of its kind, and the Tandem Source diabetes management platform. Together, these two offerings are expected to drive the company’s expansion and revenue.
Looking Ahead
Tandem reported weaker-than-expected quarterly results for Q4 2023, with an adjusted loss per share of $0.46 versus a consensus estimate of a loss per share of $0.27. Despite the company’s challenges in generating profitable returns (achieved profitability only in one year over the past decade), market participants have been bullish on the stock of late.
Management has steadfastly touted the launch of new products as a vital catalyst for further sales expansion in 2024. CEO John Sheridan shared, “2024 is positioned to be a year of tremendous opportunity for Tandem. Our portfolio of devices, applications, and insights …driving operational improvement across our business.”
Tandem projects an impressive adjusted (non-GAAP) sales figure of $850 million for 2024, notably surpassing the consensus estimate pegged at $843 million.
What is the Price Target for TNDM?
Tandem has recently garnered attention from numerous equities research analysts, with a wide range of conclusions.
Following the Q4 results, TD Cowen analyst Josh Jennings reiterated a Buy rating on TNDM stock with a price target of $35. Jennings remains “constructive” on the company’s growth potential, given its robust lineup of new offerings, including t:slim G7, t:slim Libre 2, and Mobi insulin pump. The analyst expects the company’s new launches to help it return to growth this year following a nearly 7% sales decline in 2023.
Meanwhile, Leerink Partners analyst Mike Kratky reaffirmed a Hold rating on Tandem stock with a price target of $30. The analyst prefers to be on the sidelines until he has more clarity on the company’s ability to overcome competitive pressures.
Overall, TNDM is currently rated a Moderate Buy based on five Buys, six Holds, and one Sell rating. The average price target of $31.30 indicates a potential upside of 14.48% from current levels.
Final Thoughts
Despite the recent weaker-than-expected performance, the optimistic sales projection of $850 million for 2024 seems to be energizing Tandem’s growth narrative. The promise of Tandem’s innovative product portfolio, backed by positive reinforcements of certain analysts, paints a bright future.
However, the company’s challenges in delivering profitable returns necessitate thorough due diligence by investors, for in the end, it will be earnings that you can take to the bank…not a good story.
