What happened

After receiving a buy rating and an upbeat price target from a Wall Street analyst, shares of Senseonics Holdings (SENS 4.52%), a small-cap medical device company focused on glucose-monitoring solutions for people with diabetes, jumped as much as 10% in afternoon trading on Wednesday. Shares were up 9% as of 3:05 p.m. EDT.

So what

Senseonics bulls can thank Christopher Pasquale from Guggenheim for today's jump. Pasquale reiterated his buy rating on the company's stock and also set a price target of $6 per share. That represents an almost exact double from yesterday's closing price of about $3 per share.

Traders responded to the bullish analyst note by bidding up the share price.

Businessman giving two thumbs up with money falling all around him.

Image source: Getty Images.

Now what

Senseonics shareholders have enjoyed a prosperous 2018 thus far. The company shored up its balance sheet in January by raising about $48 million through a convertible note offering. More recently, we learned that the Food and Drug Administration (FDA) voted unanimously that its Eversense system is safe, effective, and the benefits of its use outweigh the risks. When combined with today's positive analyst commentary, Sensonics' shares have jumped more than 25% since the start of the year. 

So is now a smart time to buy into Sensonics' growth story? That's a tougher call.

On the plus side, the 90-day wear time of the Eversense system will likely be attractive to many patients. On the negative side, the device is going to have a heck of a time challenging the current market leader Dexcom (DXCM -0.95%), even if it wins approval. After all, Dexcom just won FDA approval for its G6 system that can be worn for 10 days, communicate directly with a smartphone or smartwatch, and requires no finger sticks for calibration. It's hard to say whether or not the Eversense system will be able to effectively compete against those benefits.

I know firsthand just how hard it can be to successfully launch a medical device in the diabetes industry against an incumbent, so I continue to believe that skepticism is warranted. That's why I'll continue to track Senseonics' progress from the safety of the sidelines.