Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - Piper Sandler downgraded Tandem Diabetes Care (NASDAQ:TNDM) from Overweight to Neutral on Thursday, while significantly reducing its price target to $14.00 from $30.00. The stock, currently trading at $14.39, has fallen over 60% in the past six months and sits near its 52-week low of $13.94.
The research firm cited softening domestic performance as a key factor in its decision, despite noting that Tandem’s international business showed strength in recent quarterly results. According to InvestingPro data, the company maintains a healthy current ratio of 2.3, indicating strong short-term liquidity despite operational challenges.
Piper Sandler expressed particular concern about Tandem’s domestic renewal outlook, which the company now expects to remain flat next year, suggesting stalled growth in a critical market segment.
The downgrade also highlighted disappointing uptake of Tandem’s Mobi product, with the firm noting that Tandem likely ranks as a "third choice" among Type 2 diabetes patients, a segment anticipated to experience substantial growth in coming years.
Additional factors influencing the downgrade included uncertainty surrounding Tandem’s product pipeline and what Piper Sandler characterized as a "steep" gross margin outlook for the medical device company.
In other recent news, Tandem Diabetes Care announced that its SteadiSet Infusion Set has obtained 510(k) clearance from the U.S. Food and Drug Administration for use over a period of three days. This product, developed by Capillary Biomedical, a subsidiary of Tandem, is designed for one-handed insertion and aims to simplify the insulin infusion process for adults with Type 1 diabetes. The company plans to seek further FDA approval to extend the use of the SteadiSet to seven days. Meanwhile, Citi has downgraded Tandem Diabetes Care to a Sell rating from Neutral, citing increasing competition in the market. The analyst at Citi, Joanne Wuensch, also reduced the price target to $14, suggesting a potential downside. Truist Securities initiated coverage on the company with a Hold rating and set a price target of $24. Truist noted Tandem’s status as a leading U.S. durable pump manufacturer but highlighted its recent share loss and below-peer growth and profitability. These developments reflect the ongoing challenges and strategic initiatives facing Tandem Diabetes Care.
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