Tandem Diabetes Care (TNDM) AI Stock Analysis

1,412 Followers

Top Page

Tandem Diabetes Care

(NASDAQ:TNDM)

56Neutral

Tandem Diabetes Care's overall stock score is driven by strong revenue growth and strategic initiatives, such as the launch of Control-IQ+ and expansion into the type 2 diabetes market. However, significant challenges remain in terms of profitability, leverage, and bearish technical indicators. The earnings call suggests positive long-term growth potential, yet near-term risks associated with execution and market conditions temper the outlook.

Positive Factors

Growth Prospects

The results of TNDM's type 2 trial are compelling and will help restore confidence in TNDM's growth prospects.

Product Integration

Tandem Diabetes Care is expected to benefit from the integration of its products with Abbott's Libre 3 continuous glucose monitor, opening a significant patient opportunity.

Valuation

The recent sell-off has created a particularly undemanding current valuation that already reflects significant investor caution for 2025.

Negative Factors

Earnings Performance

Tandem Diabetes Care shares fell following its earnings call as results fell short of expectations.

Market Competition

Analyst's survey indicates Tandem Diabetes Care could lose market share due to higher patient preference for competing patch-pump versus tubed-pump form factors.

Sales Performance

TNDM posted US sales of $184mn, falling short of its implied 4Q guidance by 3% at the midpoint.

Tandem Diabetes Care (TNDM) vs. S&P 500 (SPY)

Market Cap

$1.13B

Dividend YieldN/A

Average Volume (3M)1.87M

Price to Earnings (P/E)―

Beta (1Y)1.39

Revenue Growth25.74%

EPS Growth57.18%

CountryUS

Employees2,650

SectorHealthcare

Sector Strength69

IndustryMedical - Devices

Share Statistics

EPS (TTM)-1.47

Shares Outstanding66,563,300

10 Day Avg. Volume1,698,182

30 Day Avg. Volume1,871,121

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)1.43

Price to Cash Flow (P/CF)31.50

P/FCF Ratio44.10

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$38.56

Price Target Upside126.03% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering16

Tandem Diabetes Care Business Overview & Revenue Model

Company DescriptionTandem Diabetes Care, Inc. is a medical device company focused on the design, development, and commercialization of products for people with insulin-dependent diabetes. The company operates within the healthcare sector, specifically in the field of diabetes management technology. Its core products include insulin pump systems and related software applications that enhance the lives of individuals managing diabetes by providing reliable and user-friendly solutions.

How the Company Makes MoneyTandem Diabetes Care generates revenue primarily through the sale of its insulin pump systems and associated supplies, such as cartridges and infusion sets. The company's flagship product line, the t:slim X2 insulin pump, is a key driver of its revenue. Additionally, Tandem offers software applications that integrate with its hardware to provide continuous glucose monitoring and data management services. Revenue is also derived from customer support services and training programs for healthcare providers and patients. Tandem's earnings are bolstered by strategic partnerships with healthcare providers and insurance companies, facilitating broader access to its products. The company also invests in research and development to innovate and enhance its offerings, which can contribute to increased market share and revenue growth.

Tandem Diabetes Care Financial Statement Overview

Summary

Tandem Diabetes Care shows strong revenue growth and improved cash flow health. However, profitability remains a concern with persistent net losses and negative operating margins. The balance sheet reflects increased leverage, though cash reserves offer some stability. Focus on enhancing operational efficiency and controlling debt levels could drive better financial performance.

Income Statement

Positive

Tandem Diabetes Care shows robust revenue growth with a 25.7% increase from 2023 to 2024. However, the company continues to operate at a net loss, with a net profit margin of -10.2% in 2024. Gross profit margin remains strong at 52.1%, but negative EBIT and EBITDA margins indicate challenges in operational efficiency.

Balance Sheet

Neutral

The balance sheet indicates a moderate debt-to-equity ratio of 1.80, showing a reliance on debt. Stockholders' equity has decreased, impacting the equity ratio to 27.2%. Return on equity is negative at -36.5%, reflecting profitability challenges. However, the company maintains a healthy cash position relative to its debt.

Cash Flow

Positive

Cash flow has improved significantly, with free cash flow turning positive in 2024. The operating cash flow to net income ratio is positive at 0.25, indicating some efficiency in converting net income into cash. The free cash flow to net income ratio is also positive, showing improved cash generation capabilities.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
940.20M	747.72M	801.22M	702.80M	498.83M
	Gross Profit
489.57M	367.69M	412.99M	376.21M	260.52M
	EBIT
-99.13M	-233.23M	-61.81M	8.81M	-7.96M
	EBITDA
-99.13M	-194.66M	-72.31M	36.50M	-13.03M
	Net Income Common Stockholders
-96.03M	-222.61M	-94.59M	15.57M	-34.38M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
438.33M	467.91M	616.90M	623.81M	484.94M
	Total Assets
967.66M	952.66M	1.05B	905.14M	716.41M
	Total Debt
473.56M	415.67M	419.88M	314.67M	228.32M
	Net Debt
404.33M	356.80M	247.36M	243.49M	133.71M
	Total Liabilities
704.56M	639.03M	612.84M	472.02M	350.11M
	Stockholders Equity
263.10M	313.63M	439.95M	433.11M	366.31M
Cash Flow		Free Cash Flow
4.99M	-83.41M	7.51M	87.85M	-7.63M
	Operating Cash Flow
24.23M	-31.81M	50.46M	111.36M	24.67M
	Investing Cash Flow
-23.48M	-85.74M	33.17M	-186.88M	-296.06M
	Financing Cash Flow
8.37M	4.11M	16.88M	51.93M	314.44M

Tandem Diabetes Care Technical Analysis

Technical Analysis Sentiment

Negative

Last Price17.06

Price Trends

50DMA

24.46

Negative

100DMA

29.28

Negative

200DMA

34.56

Negative

Market Momentum

MACD

-2.09

Negative

RSI

30.13

Neutral

STOCH

14.00

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TNDM, the sentiment is Negative. The current price of 17.06 is below the 20-day moving average (MA) of 18.86, below the 50-day MA of 24.46, and below the 200-day MA of 34.56, indicating a bearish trend. The MACD of -2.09 indicates Negative momentum. The RSI at 30.13 is Neutral, neither overbought nor oversold. The STOCH value of 14.00 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TNDM.

Tandem Diabetes Care Risk Analysis

Tandem Diabetes Care disclosed 62 risk factors in its most recent earnings report. Tandem Diabetes Care reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Tandem Diabetes Care Peers Comparison

Overall Rating

UnderperformOutperform

Sector (48)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PODD	76 Outperform	$17.84B	43.88	43.03%	―	22.07%	101.95%
AHCO	71 Outperform	$1.21B	14.32	5.45%	―	1.90%	―
UFPT	67 Neutral	$1.58B	27.57	18.76%	―	26.08%	30.54%
DXCM	61 Neutral	$26.39B	46.43	27.63%	―	11.34%	4.24%
TNDM	56 Neutral	$1.13B	―	-33.30%	―	25.74%	57.18%
LIVN	56 Neutral	$1.85B	29.58	4.87%	―	8.33%	256.54%
Sector *	48 Neutral	$6.35B	1.19	-46.26%	2.67%	19.24%	1.75%

* Healthcare Sector Average

Performance Comparison

TNDM

Tandem Diabetes Care

17.06

-14.80

-46.45%

DXCM

Dexcom

66.14

-68.42

-50.85%

PODD

Insulet

253.99

80.05

46.02%

UFPT

Ufp Technologies

209.42

-19.32

-8.45%

LIVN

LivaNova

33.96

-19.41

-36.37%

AHCO

AdaptHealth

8.66

-1.22

-12.35%

Tandem Diabetes Care Earnings Call Summary

Earnings Call Date: Feb 26, 2025 | % Change Since: -49.21% | Next Earnings Date: Apr 30, 2025

Earnings Call Sentiment Positive

The earnings call highlighted significant achievements, including record sales, the launch of the Control-IQ+ system, and expansion into the type 2 diabetes market. However, challenges remain with U.S. sales shortfalls, potential disruptions from sales force realignment, and international transition complexities. Overall, the positive developments and strategic initiatives indicate strong growth potential, though execution risks exist.

Highlights

Record-Breaking Revenue and Growth

Tandem Diabetes achieved record annual worldwide sales of $910 million, marking an 18% increase year-over-year. Fourth quarter sales were also a record at $252 million.

Launch of Control-IQ+

The launch of Control-IQ+ is imminent, offering enhancements like superior glucose control and new clinical features, benefiting both type 1 and type 2 diabetes patients.

Type 2 Diabetes Market Expansion

Control-IQ+ received FDA clearance for use in adults with type 2 diabetes, doubling the addressable market in the U.S. and positioning Tandem for significant long-term growth.

International Sales Growth

Sales outside the U.S. grew by 39% year-over-year, driven by strong demand for the t:slim X2 pump, with plans to transition to direct operations in Europe by 2026.

Pharmacy Channel Progress

Tandem has approximately 20% of U.S. lives covered under pharmacy agreements, a strategic move to increase access and affordability for patients.

Lowlights

Fourth Quarter U.S. Sales Shortfall

The U.S. fourth quarter did not meet expectations due to muted seasonal demand and shipping delays, impacting revenue timing.

Potential Disruption from Sales Force Realignment

The U.S. sales force underwent a realignment and expansion, with potential short-term disruption as the team adjusts to new territories and strategies.

Challenges with International Transition

The transition to direct sales in select European countries may cause disruption and a potential $15 million to $20 million headwind.

Company Guidance

During the Tandem Diabetes Fourth Quarter and Year-End 2024 Earnings Conference Call, the company provided detailed guidance for 2025, highlighting key growth metrics and strategic initiatives. Tandem reported a record 2024 sales of $910 million, reflecting an 18% increase year-over-year, driven by strong pump shipments and operational efficiencies. The company anticipates worldwide sales in 2025 to range from $997 million to slightly over $1 billion, representing a 10% to 11% growth. In particular, U.S. sales are expected to grow 13% to 14%, supported by a strategic sales force expansion and enhanced market access through the Pharmacy channel, which now covers approximately 20% of U.S. lives. Tandem also emphasized its entry into the type 2 diabetes market, following FDA clearance of its Control-IQ+ algorithm for type 2 diabetes, which is expected to significantly expand its addressable market. Additionally, the company forecasts a 54% gross margin for 2025, driven by increased Mobi pump sales and efficiency initiatives. Tandem's strategic focus on innovation, including the integration with FreeStyle Libre 3 and the launch of new technology solutions, positions it for long-term growth and profitability.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.