Tandem Diabetes Care Inc (TNDM) Strong First Quarter Revenue Growth Sends Shares on a Tear

Tandem Diabetes Care Inc (NASDAQ:TNDM) hit a preliminary home run with its first quarter earnings show for 2018, releasing an exciting revenue beat that has investors cheering today. It is no wonder shares are jumping almost 22% when revenue for the quarter rocketed 42% year-over-year to $27 million- surpassing consensus expectations of $25.1 million. Pump shipments likewise were a robust point of TNDM’s preliminary quarterly results, with the medical device manufacturer shipping 4,400 pumps in the first quarter- a 56% year-over-year rise.

A bull like Oppenheimer Steven Lichtman had been anticipating $24.9 million in revenue and 40% year-over-year growth in pump shipments to 3,942, leaving the analyst thrilled to see the “solid performance” from Tandem Diabetes.

In reaction to the print, the analyst maintains an Outperform rating on TNDM stock with a $7.50 price target, which implies a just under 8% upside from current levels. (To watch Lichtman’s track record, click here)

“The near-term strength is likely driven by core business momentum (t:slim X2 with Dexcom’s G5), incremental J&J Animas patient conversions, and the building replacement cycle. As a reminder, we expect further tailwinds beginning in 2H18 on TNDM’s next generation pump pipeline,” writes Lichtman.

The healthcare player closed out the first quarter boasting $81.9 million between cash, cash equivalents, short-terms, and restricted cash. This follows on back of $64 million in net proceeds realizes from the company’s equity raise back two months ago coupled with $6.5 million garnered from warrant exercises in the first quarter. Moving forward, the TNDM management team looks for sustained exercising of Series B warrants ahead of the expiration date hitting in a weeks’ time. Additionally, another roughly $10 million has the option to prospectively get exercised at $3.50 per share.

Analyst Ratings

TipRanks reveals Tandem is a Strong Buy on the Street when taking note of consensus sentiment. Out of 4 analysts polled in the last 3 months, 3 are bullish on TNDM stock while only 1 plays it safe on the sidelines. However, notably analysts’ expectations have not caught up with today’s skyrocketing share valuation: the 12-month average price target stands at $6.00, marking a 14% in loss potential from where the stock is currently trading.

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