Tandem Diabetes Care, Inc. (NASDAQ:TNDM) Just Reported Second-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?

A week ago, Tandem Diabetes Care, Inc. (NASDAQ:TNDM) came out with a strong set of second-quarter numbers that could potentially lead to a re-rate of the stock. Revenues beat expectations coming in atUS$222m, ahead of estimates by 7.2%. Statutory losses were somewhat smaller thanthe analysts expected, coming in at US$0.47 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Tandem Diabetes Care

Taking into account the latest results, the most recent consensus for Tandem Diabetes Care from 16 analysts is for revenues of US$886.6m in 2024. If met, it would imply a solid 11% increase on its revenue over the past 12 months. Losses are supposed to decline, shrinking 16% from last year to US$1.75. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$868.6m and losses of US$1.66 per share in 2024. So it's pretty clear consensus is mixed on Tandem Diabetes Care after the new consensus numbers; while the analysts lifted revenue numbers, they also administered a moderate increase in per-share loss expectations.

The consensus price target stayed unchanged at US$51.80, seeming to suggest that higher forecast losses are not expected to have a long term impact on the valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Tandem Diabetes Care at US$75.00 per share, while the most bearish prices it at US$18.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Tandem Diabetes Care's rate of growth is expected to accelerate meaningfully, with the forecast 24% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 18% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.2% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Tandem Diabetes Care to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Tandem Diabetes Care. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Tandem Diabetes Care going out to 2026, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Tandem Diabetes Care that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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