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Why Diabetes Stock Insulet Jumped Nearly 21% in April

By Beth McKenna – May 3, 2020 at 1:43PM

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Shares of the tubeless insulin pump maker are also outperforming the market in 2020.

What happened

Shares of Insulet (PODD -0.36%), which makes the Omnipod tubeless insulin pump, surged 20.6% in April, according to data from S&P Global Market Intelligence. The S&P 500 index returned 12.8% last month.

In 2020, shares of the fast-growing healthcare stock are up 13.8% through May 1, whereas the S&P 500 has returned negative 11.8% over this period.

A two-pane image with the top pane showing an Omnipod attached to a woman's lower stomach and the bottom pane showing the handheld control for the device.

Image source: Getty Images.

So what

Insulet didn't release any market-moving news in April. We can attribute the stock's big pop last month largely to the strength in the overall market.

To put April's gains in context, Insulet stock was down 12.8% in March, while the S&P (including dividends) dropped 12.4% due to the coronavirus-driven market sell-off.

Insulet has been pumping out strong financial results. In 2019, reported in late February, revenue jumped 31% year over year to $738.2 million, and earnings per share (EPS) soared 280% to $0.19.

Now what

Investors shouldn't have long to wait for material news. Insulet is scheduled to report its first quarter 2020 results on Thursday, May 7, after the market close. 

For the quarter, management expects revenue growth of 17% to 20% year over year. It also had guided for full-year 2020 revenue growth of 14% to 18% over 2019. The company doesn't provide earnings guidance.

Many companies are tweaking or entirely pulling their previously issued 2020 guidance due to the uncertainties surrounding the COVID-19 pandemic. It's possible Insulet will do the same.

Beth McKenna has no position in any of the stocks mentioned. The Motley Fool recommends Insulet. The Motley Fool has a disclosure policy.

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