On Thursday, CFRA, a leading financial research organization, raised its price target on shares of Tandem Diabetes Care (NASDAQ:TNDM) to $36 from the previous $29, while retaining a Hold rating on the stock. The adjustment reflects a $7 increase in the stock target price, with the firm applying a wider risk premium and a forward price-to-sales (P/S) ratio of 2.75 times, slightly above the 2.5 times average of its peers.
Tandem Diabetes Care, recognized as a global leader in insulin delivery and diabetes technology, is anticipated to experience a significant growth year in 2024. The company is set to expand and introduce its automated insulin delivery system. Tandem Diabetes has been identified as having the top insulin pump offering in the U.S. market.
The company faces competition from DexCom's recently launched G7 device and Abbott's Freestyle Libre 2. In response, Tandem Diabetes is gearing up to release its next-generation product, the Tandem Mobi (t:sport) pump. This new pump is notably smaller than the current t:slim X2 model and is designed to allow pump control via a mobile application. The Tandem Mobi obtained FDA clearance in 2023.
Tandem Diabetes management has expressed confidence that new product releases planned for 2024 will drive a 10% year-over-year sales growth, reaching a target of $850 million. The Mobi pump is expected to significantly contribute to achieving the company's long-term gross margin goal of 65%.
The company concluded 2023 with a robust financial position, reporting $468 million in cash and cash equivalents and a total debt of $285 million.
InvestingPro Insights
As Tandem Diabetes Care (NASDAQ:TNDM) gears up for potential growth with the introduction of its Tandem Mobi pump, investors and analysts alike are keeping a close eye on the company's financial health and market performance. According to InvestingPro data, Tandem has a market capitalization of approximately $2.19 billion, despite a negative P/E ratio of -9.84, which indicates that the company is not currently profitable.
This aligns with the InvestingPro Tips that analysts do not expect the company to be profitable this year. Nevertheless, Tandem's liquid assets surpass short-term obligations, suggesting a degree of financial stability. Moreover, the company has experienced a large price uptick over the last six months, with a 87.64% total return, reflecting investor optimism.
These insights could be critical for investors considering Tandem Diabetes Care as part of their portfolio. For those looking for in-depth analysis, InvestingPro offers a wealth of additional tips, with 7 more tips available for TNDM, to help make informed decisions. Readers of this article can take advantage of an exclusive offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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