Evolving insulin delivery landscape
Until the start of 2017, the insulin pump technology space was mainly dominated by big companies such as Medtronic (MDT) and Johnson & Johnson (JNJ). However, in October 2017, Johnson & Johnson issued a press release announcing intentions to exit the insulin pump market. The company also offered to transfer around 90,000 of its patients using Animas insulin pumps to Medtronic’s pump.
Although Medtronic was the major beneficiary of Johnson & Johnson’s exit, this event coupled with a continuous focus on innovation has driven uptake of insulin pumps offered by smaller diabetes MedTech players such as Tandem Diabetes Care (TNDM) and Insulet (PODD).
Tandem Diabetes Care rallied by 1,394.88% in 2018 from $2.54 on January 2 to $37.97 on December 31. The stock has been already up by 88.83% in 2019 YTD and closed at $71.70 on June 7. Insulet Corp rose by a lower 14.96% from $69.00 on January 2 to $79.32 on December 31. However, the stock is also 40.46% up in 2019 YTD and closed at $111.41 on June 7. To evaluate which of the two is a better pick in the long run, we take a look at the various pros and cons of both the companies.
Analysts’ recommendations and Target price
The consensus recommendation for both Tandem Diabetes Care and Insulet Corp is “buy.” Wall Street analysts expect an upside potential of 11.58% for Tandem Diabetes Care based on the company’s closing price on June 7. Analysts have gradually increased the company’s 12-month consensus target price from $67.27 in February to $72.00 in March to $78.92 in April to $80.00 in May. The highest and lowest target estimate is 100 and 70, respectively. Out of 13 analysts covering Tandem Diabetes Care, four recommend a “strong buy,” six recommend a “buy,” and three recommend a “hold.”
Wall Street analysts expect a downside potential of 4.07% for Insulet Corp based on the company’s closing price on June 7. Analysts have gradually increased the company’s 12-month consensus target price from $103.73 in February to $104.40 in March to $106.56 in April to $106.88 in May. The highest and lowest target estimate is 118 and 97, respectively.
Out of 18 analysts covering Insulet, seven recommend a “strong buy,” seven recommend a “buy,” and four recommend a “hold.”