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Investing.com -- Truist Securities launched coverage on four diabetes technology companies, saying there is a long-term growth potential for continuous glucose monitors (CGM) and insulin pumps amid rising adoption in both type 1 and type 2 diabetes patients.
The firm started Dexcom (NASDAQ:DXCM), Insulet (NASDAQ:PODD), and Beta Bionics with Buy ratings, while initiating Tandem Diabetes Care (NASDAQ:TNDM) at Hold.
Truist already covers Medtronic’s diabetes business, which it rates “Hold.”
Truist said the diabetes device sector is positioned for double-digit growth over the next several years, driven by expanding use in underpenetrated global markets and a shift toward more patient-centric care.
Survey feedback from physicians suggested stronger adoption of pumps and CGMs in type 2 diabetes, particularly among patients using insulin.
Among the large-cap names, the firm favored Dexcom and Insulet, citing strong profitability and leadership in the growing CGM and patch pump segments.
While Truist said that Insulet’s recent CEO change may introduce some near-term uncertainty, it said the company’s growth trajectory remains intact.
Dexcom, which has faced concerns following mid-2024 execution missteps and rising competition from Abbott’s Libre system, still offers a favorable risk-reward, Truist said, pointing to a lower relative valuation and catalysts such as guideline updates and expanding reimbursement for type 2 diabetes.
In the small-cap space, Truist preferred Beta Bionics over Tandem.
It noted both firms face challenges in the slower-growing durable pump market but said Beta Bionics’ iLet system has a potential ease-of-use advantage and a head start in transitioning to more profitable pharmacy distribution channels.
Regarding potential volatility in shares of both Beta Bionics and Tandem, Truist said the broader diabetes device market remains one of the most attractive growth areas in medtech, supported by technology innovation, evolving reimbursement, and increased patient engagement.