About a half-billion adults in the world have diabetes. This chronic health condition causes severe hardships to patients and contributes substantially to healthcare costs.
It’s no wonder that many companies continue developing innovative products to help diabetes patients manage the disease. One of them is Tandem Diabetes Care (NASDAQ: TNDM), a medical device specialist that markets insulin pumps.
Though Tandem Diabetes Care has not performed well on the stock market over the past year, there is hope for the company. Let’s find out why Tandem could still be an excellent investment for patient investors.
Tandem’s recent financial results
Tandem Diabetes Care’s recent financial results have been subpar. In 2023, the company’s non-GAAP (generally accepted accounting principles) sales came in at $772.8 million, down almost 4% year over year. Tandem did not sell as many pumps in 2023 as it did in 2022; pump shipments declined nearly 19% year over year to 104,000. Tandem ended the year with an installed base of 452,000, 7% higher than the previous fiscal year.
One factor behind Tandem’s less-than-impressive results has been economic conditions, including inflation. Patients strapped for cash are less likely to spend the money on a new insulin pump, especially if they already have one. Multiple daily injections are more cost-effective than pumps, so patients are less likely to switch to the latter when the economy isn’t doing too well.
Tandem’s dropping top line isn’t doing better than the bottom line. Last year, the company’s net loss per share came in at $3.43, much worse than the $1.47 reported in the previous fiscal year. When revenue and earnings are both moving in the wrong direction, that isn’t good for any company.
A new product could make a difference
However, there is more to Tandem Diabetes Care. Plenty of corporations, including prominent ones, don’t perform as well amid economic troubles. Tandem’s fortunes could change once the economy improves, pump shipments bounce back, and revenue starts moving in the right direction again. Tandem’s sales guidance for 2024…
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