Why Insulet Stock Is Soaring after Q2 Results

Insulet (PODD) stock has risen 19.27% today to $140.65. The stock is soaring in response to the company’s strong second-quarter results yesterday. The company raised its fiscal 2019 revenue guidance from $667 million–$690 million to $700 million–$750 million. It now expects YoY (year-over-year) revenue growth of 24%–27%, much higher than its previous guidance of 18%–22%.

Insulet’s earnings

In the second quarter, Insulet’s revenue rose 42.55% YoY to $177.14 million, beating analysts’ estimate by $13.5 million and the company’s guidance of $160 million–$165 million. The company’s non-GAAP EPS of $0.02 were $0.01 lower than analysts’ estimate.

Omnipod’s performance

In the second quarter, Insulet’s US Omnipod revenue rose 26% YoY to $98.1 million, beating its guidance of $89 million–$91 million. Its international Omnipod revenue grew 120% YoY to $62.7 million, surpassing its $57 million–$59 million guidance. Meanwhile, its global Omnipod revenue rose 51% YoY to $160.8 million.

The company stated that Omnipod demand is growing in Europe. Also, the shift from a distributor-based business model to direct operations has boosted Omnipod’s European pricing by 50% YoY. However, inventory buybacks from the distributor pushed down Omnipod international revenue sequentially. To learn more, read Analyzing Tandem Diabetes and Insulet’s International Strategy and What Are Insulet’s Key Growth Drivers in 2019?

Fiscal 2019 guidance raised across businesses

In fiscal 2019, Insulet now expects its US Omnipod revenue to rise 21%–23% YoY to $391 million–$399 million, up from its previous estimate of 16%–19% YoY growth to $376 million–$385 million. The company estimates its international Omnipod revenue will rise 43%–45% YoY to $246 million–$250 million. Its previous guidance of $236 million–$244 million implied a 37%–42% YoY rise.

Insulet expects its drug delivery revenue to fall just 3%–8% YoY to $63 million–$66 million, down from its expected fall of 11%–19% YoY to $55 million–$61 million.

Insulet’s valuation

Insulet’s forward PE multiple of 142.77x is significantly higher than that of diabetes medtech peers Medtronic and Abbott Laboratories. The 18 analysts tracking Insulet stock have set its average target price at $140.35, which implies a 0.03% fall in the next year from its current price.