A month has gone by since the last earnings report for Tandem Diabetes (TNDM). Shares have added about 1.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Tandem Diabetes due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Strong t:slim X2 Rollout Drives Revenues for Tandem in Q4
Tandem Diabetes reported earnings per share of 2 cents in fourth-quarter 2018 compared with net loss of $1.23 posted in the year-ago period. The Zacks Consensus Estimate was pegged at a loss of 22 cents.
For the full year, the company registered loss of $2.55 per share, much narrower than the year-ago loss of $12.87 per share. The Zacks Consensus Estimate was pegged at a loss of $3.22 per share.
Revenues in Detail
Revenues in the quarter totaled $76.2 million, sailing past the Zacks Consensus Estimate by 34.9%. The top line also surged 89.1% from the year-ago quarter.
The roll-out of t:slim X2 with Basal-IQ technology, increased supply capacity and renewal sales, strengthening the company’s core business, along with its international launch, considerably drove top-line growth.
In the fourth quarter, Tandem Diabetes’ pump shipments soared 133% year over year to 16,168 pumps. Of these, 3,200 pumps were shipped to international markets. Accordingly, Tandem Diabetes recorded international sales of $7.1 million in the quarter.
Interestingly, the company had begun shipping pumps to select geographies for commencing international operations in August 2018.
For the full year, the company registered sales of $183.9 million, a 70.9% surge from the year-ago period. The reported figure also exceeded the Zacks Consensus Estimate by 11.9%.
Margins
Gross profit in the reported quarter came in at $41.5 million, significantly up 137.8% from the prior-year period. Gross margin came in at 54.5%, expanding 1116 basis points (bps) on benefits from a number of factors. These include increased production volumes, creating leverage of fixed overhead costs, manufacturing efficiencies gained in the new facility, a high percentage of pump sales and improved percentage of infusion set sales following the t:lock connector launch.
Total operating expenses came in at $40.9 million compared with $27.1 million in the prior-year quarter. Operating profit in the quarter under review was $0.56 million compared with operating loss of $9.5 million posted a year ago.
Guidance
Tandem has provided its guidance for full-year 2019. The company expects total sales in the range of $255-$270 million, reflecting annual sales growth of around 39-47% from 2018. The Zacks Consensus Estimate for revenues is pegged at $224.9 million, below management’s guided range.
How Have Estimates Been Moving Since Then?
Fresh estimates followed an upward path over the past two months. The consensus estimate has shifted 17.6% due to these changes.
VGM Scores
At this time, Tandem Diabetes has a great Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Tandem Diabetes has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Tandem Diabetes Care, Inc. (TNDM): Free Stock Analysis Report
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