Tandem Diabetes Care, Inc. TNDM has witnessed strong momentum in the past year. Shares of the company have risen 45.7% compared with the industry’s 7.3% growth during the same time frame. The S&P 500 composite has increased 24.7%.

With healthy fundamentals and strong growth opportunities, this Zacks Rank #3 (Hold) company appears to be a solid wealth creator for its investors at the moment.

Tandem Diabetes Care, Inc. designs, develops and markets products for people with insulin-dependent diabetes. Its flagship product, the t:slim X2 Insulin Delivery System, or t:slim X2, is the smallest durable insulin pump available. It is also the only available pump capable of remote feature updates. 

As part of the AID (automated insulin delivery) systems, the company offers pump integration with multiple CGM sensors, which helps provide customizable solutions for people living with diabetes. Tandem Diabetes’ portfolio also comprises a web-based data management platform, Tandem Source. The company also has a popular mobile app, Sugarmate, which allows users to log glucose data and health and nutrition information. The app can provide notifications and alerts to its users, their families and caregivers.

Factors Favoring TNDM’s Share Growth

Tandem Diabetes’ share price is trending upward, prompted by its expanding robust portfolio of delivery devices, applications and data management tools. The launch of Tandem Source in the United States also helps the company capitalize on the vast opportunities within the diabetes market. The flagship t:slim X2’s integration with Dexcom G7 and Lyumjev validates the company’s effort to strengthen its market expansion ability. This optimism, led by a solid third-quarter performance and increasing revenues, is expected to contribute further.

Investors showed optimism about Tandem Diabetes’ multi-year collaboration agreement with the University of Virginia Center for Diabetes Technology. The partnership will focus on advancing research and development efforts on fully automated closed-loop insulin delivery systems.

Tandem Diabetes exited the third quarter of 2024 with impressive results. The company recorded the highest quarterly sales in the company's history, both in the United States and internationally. This strong performance was driven by outstanding feedback on the newly launched Tandem Mobi. 

TNDM reported an adjusted gross profit of $124.6 million in the third quarter, marking a 38.9% year-over-year increase. The gross margin improved 274 basis points (bps) to 51.1%. The improvement in gross margin has positively impacted the stock, contributing to its price increase.

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Investors seem optimistic regarding the updated earnings guidance. On its third-quarter 2024 earnings call, Tandem Diabetes raised its revenue guidance for 2024. It now expects revenues to be in the range of $$903-$910 million (earlier $885-$892 million). 

Factors That May Offset OMCL’s Gains

In the third quarter of 2024, the company’s cost of sales increased 24.5% from the prior-year level. This was due to headwinds arising from unfavorable general economic conditions, such as a recession or economic slowdown due to political instability and military hostilities in certain geographies and monetary and financial uncertainties in Europe, among others.

A Look at TNDM’s Estimates

The company expects earnings per share (EPS) growth rate of 28.8% for 2025 compared with the industry’s 16.5%. 

The Zacks Consensus Estimate for 2025 revenues is pegged at $1.01 billion, which suggests an increase of 10.5% from the year-ago reported number.

Stocks to Consider

Some better-ranked stocks in the broader medical space are ResMed RMD, Masimo MASI and Abbott Laboratories ABT. 

ResMed, carrying a Zacks Rank #2 (Buy) at present, has an estimated EPS growth rate of 21.1% for 2025. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

ResMed’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 6.41%. Its shares have risen 31.6% against the industry’s 12.8% decline in the past year.

Masimo, carrying a Zacks Rank #2 at present, has an estimated growth rate of 11.8% for 2025. MASI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 17.10%. Its shares have risen 51.4% compared with the industry’s 6.8% growth in the past year. 

Abbott, carrying a Zacks Rank of #2 at present, has an estimated earnings growth rate of 10% for 2025. It delivered a trailing four-quarter average earnings surprise of 1.64%. ABT’s shares have risen 9.5% in the past six months compared with the industry’s 9.4% growth.

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