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Truist Securities initiated coverage of Tandem Diabetes Care (NASDAQ:TNDM) on Monday with a hold rating and a $24.00 price target. The medical device company, currently valued at $1.38 billion, has seen its stock decline 42% year-to-date despite maintaining a healthy gross margin of 52%.
The research firm cited Tandem’s position as a leading U.S. durable pump manufacturer that has experienced share loss and below-peer growth and profitability in recent years. According to InvestingPro analysis, the company is not currently profitable, though it maintains strong liquidity with a current ratio of 2.3.
Truist noted that new product launches, including Mobi and tubeless offerings, should improve Tandem’s position in underpenetrated Type 1 and Type 2 diabetes markets.
The firm pointed out that Tandem remains heavily indexed to a slower-growing durable pump and durable medical equipment channel, and while its broadening portfolio should help, Truist sees other players better positioned to capture market share.
While Truist expects the Mobi product to drive better gross margins compared to the company’s current t:slim X2 with Control-IQ system, the firm believes Tandem needs an even steeper profit ramp and faster growth to push its stock sustainably higher.
In other recent news, Tandem Diabetes Care reported its first-quarter 2025 earnings with a significant shortfall, posting an EPS of -1.97 against a forecast of -0.6. Despite this earnings per share miss, the company achieved a revenue of $234 million, marking a 22% year-over-year increase, driven by strong international sales and surpassing analysts’ expectations. Canaccord Genuity responded by raising its price target for Tandem Diabetes Care to $59, maintaining a Buy rating, and highlighting the company’s robust revenue performance, particularly in the U.S. and international markets.
Tandem Diabetes Care also received FDA clearance for its SteadiSet Infusion Set, which is designed for up to three days of use, with plans to seek approval for an extended seven-day usage. This development is part of the company’s ongoing efforts to enhance its diabetes management solutions. Additionally, Tandem projects 2025 worldwide sales between $997 million and $1 billion, with a target gross margin of 54%, aiming for a 60% gross margin by 2026.
The company is also focusing on expanding its product pipeline, including the anticipated integration of its t:slim X2 with Abbott’s Libre 3 Plus and the potential launch of Mobi in international markets by the second half of 2025. Tandem Diabetes Care’s management has expressed optimism about future growth, particularly in the type 2 diabetes market, and the opportunity for margin expansion. Despite some challenges, including the restructuring of the U.S. salesforce, analysts like Canaccord Genuity remain positive about Tandem’s positioning for growth.
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