On Wednesday, Stifel, a financial services company, increased the price target for Tandem Diabetes Care (NASDAQ:TNDM) shares from $55.00 to $60.00, while reiterating a Buy rating on the stock. The adjustment comes in response to the company's announcement regarding the availability of its new product, Mobi, in conjunction with the Dexcom (NASDAQ:DXCM) G7 sensor.
Tandem Diabetes Care revealed that it would commence the rollout of Mobi over the coming weeks. This development is considered to be ahead of schedule, as previous statements had indicated an integration with Dexcom G7 expected later in the second quarter of 2024. The firm believes that the U.S. Pump market has experienced a pause in anticipation of new sensor integrations, which has impacted market growth in recent quarters.
The integration of Tandem's X2 and now Mobi with the Dexcom G7 sensor is seen as a strategic move to address the deferred demand in the U.S. market. This could lead to an increase in new prescriptions (NRx) growth for Tandem Diabetes Care. Although positive NRx growth is not anticipated until the third quarter of 2024, with a forecast of a 2% increase, the analyst suggests that the second quarter's NRx estimate of a 15% decline is more achievable, especially considering the initially expected more substantial G7 and Mobi rollout in the third quarter.
In other recent news, Tandem Diabetes Care has been the subject of several analyst upgrades and price target revisions. Lake Street Capital Markets highlighted Tandem's potential for robust growth in 2024, driven by the introduction of innovative products such as the Mobi system and Tandem Source. Similarly, Citi upgraded Tandem to a Buy rating, citing its strong financial performance and conservative revenue guidance. Piper Sandler also raised its share price target for Tandem, following the company's positive first-quarter results and upward revision of their full-year guidance. Meanwhile, Baird increased Tandem's price target, acknowledging the company's revenue growth and the early success of the Mobi insulin delivery system, but maintained a Neutral rating due to concerns about new patient start rates.
Furthermore, Tandem reported a 12% year-over-year increase in worldwide sales in the first quarter, reaching $193 million, and raised its 2024 sales guidance to approximately $868 million. The company credited its recent product launches, including the Mobi miniature durable pump, for contributing to this growth. Looking ahead, Tandem is preparing to integrate the Dexcom G7 into its products and is working on enhancements to its Control-IQ technology.
These recent developments indicate a positive growth trajectory for Tandem Diabetes Care, driven by strong financial performance, successful product launches, and strategic investments in technology integration. However, analysts have also noted potential challenges, including the need to increase new patient start rates and mitigate increased operating expenses. As Tandem continues to navigate these challenges, it remains committed to delivering innovative solutions for diabetes management.
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