What happened
Shares of Tandem Diabetes Care (TNDM 0.10%) rose over 11% last month, according to data from S&P Global Market Intelligence. The insulin delivery and diabetes technology company reported first-quarter 2019 earnings on the final day of April. The business more than doubled revenue and nearly tripled gross profit compared to the year-ago period.
The strong start to the year was driven by demand for its t:slim X2 insulin pump, which is a trend that should remain firmly intact for the foreseeable future. Case in point: in early June, Tandem Diabetes Care announced positive results from two studies evaluating the medical device. Shares have gained over 16% since the start of May when accounting for that.
Image source: Getty Images.
So what
The business appears to have finally reached an inflection point thanks to the t:slim X2 insulin pump. Tandem Diabetes Care sold 14,732 insulin pumps in Q1 2019, up from just 4,444 in the same quarter of 2018. While the company is still losing money, it's on the path to profitability.
|
Metric |
Q1 2019 |
Q1 2018 |
Year-Over-Year Change |
|---|---|---|---|
|
Pump sales |
14,732 |
4,444 |
232% |
|
Revenue |
$66.0 million |
$27.3 million |
142% |
|
Gross profit |
$33.3 million |
$11.4 million |
192% |
|
Operating income |
($11.0 million) |
($15.5 million) |
N/A |
|
Operating margin |
(16.7%) |
(56.7%) |
N/A |
Data source: SEC filing.
Surging growth led management to increase its full-year 2019 guidance quite a bit. After previously expecting revenue of $255 million to $270 million, the business is now aiming for $300 million to $315 million, which would represent year-over-year growth of 67% at the midpoint. Meanwhile, gross margin for the year is expected to rise to 52%, up from 49% last year.
Now what
This is going to be an important year for Tandem Diabetes Care. The business is growing at an impressive clip and barreling toward profitability, which has everything to do with the stock's 360% rise in the past year. Considering the company exited March with $125 million in cash on hand, it's well positioned to capitalize on the opportunity ahead.
