Tandem Diabetes Care Is Maintained at Overweight by Barclays

Tandem Diabetes Care, Inc. TNDM posted a third-quarter 2024 loss of 36 cents per share compared with the year-ago quarter’s reported loss of 38 cents. The figure beat the Zacks Consensus Estimate of a loss of 43 cents per share.

On a GAAP basis, the loss was 35 cents per share compared with the year-ago loss of 51 cents.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Following the earnings announcement, TNDM stock fell 2% in aftermarket trading yesterday.

TNDM’s Q3 Revenues

GAAP revenues in the quarter totaled $244 million, up 31.5% year over year. The figure topped the Zacks Consensus Estimate by 9.2%.

Non-GAAP revenues amounted to $242.9 million, up 25.3% year over year.

From September 2022 through February 2024, the company offered the Tandem Choice Program to eligible t:slim X2 customers to provide a pathway to the ownership of its newest hardware platform, Tandem Mobi, when available. Based on that, Tandem Diabetes is now reporting adjusted revenues as well.

TNDM’s Quarterly Performance in Detail

Tandem Diabetes reports under two primary markets based on the geographic location to which its products are shipped.

The United States

Total sales in this region were $171.7 million on a GAAP basis, up 31.9% year over year. Non-GAAP sales in the United States totaled $170.6 million. The company shipped approximately 21,000 pumps in the third quarter.

Outside the United States

In the third quarter, the company registered GAAP sales of $72.3 million (same on a non-GAAP basis) compared with $53.4 million in the prior-year period.

Margins

The gross profit in the reported quarter was $124.6 million, up 38.9% year over year. The gross margin expanded 274 basis points (bps) to 51.1% despite a 24.5% rise in the cost of sales.

SG&A expenses rose 25.6% to $99.6 million. R&D expenses rose 21.9% to $51.1 million.

The company registered an adjusted operating loss of $26.1 million in the third quarter compared with a loss of $31.5 million in the year-ago period.

Financial Position

Tandem Diabetes exited the third quarter of 2024 with cash, cash equivalents and short-term investments of $473.3 million compared with $452.4 million at the end of the second quarter of 2024.

TNDM’s Updated 2024 Guidance

Tandem Diabetes raised its sales outlook for 2024.

For the full year, non-GAAP sales are now estimated to be in the range of $903-$910 million (earlier $885-$892 million). The Zacks Consensus Estimate for full-year 2024 revenues is pegged at $889.6 million.

Tandem Diabetes Care, Inc. Price, Consensus and EPS Surprise

Tandem Diabetes Care, Inc. price-consensus-eps-surprise-chart | Tandem Diabetes Care, Inc. Quote

Non-GAAP sales in the United States are expected to be in the band of $645-$650 million (previously $640-$645 million). Sales outside the United States are projected to be in the range of $258-$260 million (earlier $245-$247 million).

Our Take

Tandem Diabetes’ third-quarter earnings and revenues surpassed estimates. The company recorded the highest quarterly sales in the company's history, both in the Unites States and internationally. This strong performance was driven by TNDM’s expanding product portfolio and underscored by outstanding feedback on the newly launched Tandem Mobi. Meanwhile, the expansion of the gross margin amid rising costs is encouraging.

Also, the raised sales outlook for the full year bodes well for the stock. On the flip side, the company’s operating loss is concerning.

TNDM’s Zacks Rank & Other Key Picks

TNDM currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks from the broader medical space are Phibro Animal Health PAHC, Quest Diagnostics DGX and HealthEquity HQY.

Phibro Animal Health reported fourth-quarter fiscal 2024 adjusted earnings of 41 cents per share, which topped the Zacks Consensus Estimate by 20.6%. Revenues of $273.2 million beat the Zacks Consensus Estimate by 4.1%. PAHC sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

PAHC’s fiscal 2025 earnings are expected to surge 31.9% compared with the industry’s 11.6% growth. The company’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 4.1%.

Quest Diagnostics reported third-quarter 2024 adjusted earnings of $2.30 per share, which topped the Zacks Consensus Estimate by 1.8%. Revenues of $2.49 billion beat the consensus mark by 3.4%. DGX carries a Zacks Rank #2 at present.

DGX’s 2024 earnings are expected to surge 2.1%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.3%.

HealthEquity, carrying a Zacks Rank #2 at present, reported second-quarter fiscal 2025 adjusted earnings of 86 cents per share, which surpassed the Zacks Consensus Estimate by 22.9%. Revenues of $299.9 million topped the Zacks Consensus Estimate by 5.4%.

HQY has an estimated long-term earnings growth rate of 28.2% compared with the industry’s 13.4%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 19.8%.

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