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With a market cap of $13.5 billion, Massachusetts-based Insulet Corporation (PODD) operates in the healthcare sector and specializes in insulin delivery systems. The company's flagship Omnipod platform, including the Omnipod 5 and Omnipod DASH systems, offers innovative, tubeless insulin delivery solutions for people with insulin-dependent diabetes.
Shares of this insulin infusion systems maker have underperformed the broader market over the past 52 weeks. PODD has risen 5.2% over this time frame, while the broader S&P 500 Index ($SPX) has gained 27.7%. In 2024, PODD stock declined 11.3%, compared to SPX's nearly 18% YTD gain.
Narrowing the focus, Insulet has also fallen short of the US Medical Devices iShares ETF's (IHI) 12.9% rise over the past 52 weeks and an 8.2% increase on a YTD basis.
Insulet has underperformed due to high valuations that exceeded its operational growth and market pressure from emerging diabetes treatments like GLP-1 drugs. Additionally, substantial net debt and margin pressures have negatively impacted its stock performance. Moreover, despite beating Q2 revenue estimates on Aug. 8, the stock dipped 8.8% the following day due to concerns about a $13.5 million charge for unutilized inventory, which negatively impacted its gross margin. Additionally, despite raising the company's annual revenue growth forecast, the charge and slightly lower-than-expected adjusted profit of $0.55 per share overshadowed the company's positive outlook.
For the current fiscal year, ending in December, analysts expect PODD's EPS to grow 10.6% year over year to $3.04. The company's earnings surprise history is mixed. It beat the consensus estimates in three of the last four quarters while missing on one another occasion.
Among the 20 analysts covering the stock, the consensus rating is a “Strong Buy.” That’s based on 16 “Strong Buy” ratings, one “Moderate Buy,” and three “Holds.”
This configuration is slightly more bullish than three months before, with 15 analysts suggesting a "Strong Buy."
On Aug. 27, Josh Jennings from TD Cowen maintained a "Buy" rating on Insulet, setting a price target of $264 – the Street-high price target. This suggests that the stock could rally as much as 37.1% from here. The mean price target of $235.84 represents a premium of 22.5% to PODD's current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
