Baird Initiates DexCom, Tandem Diabetes At Outperform On Large Growth Expectations

In a report published Wednesday, Baird analyst Jeff D. Johnson initiated coverage of

and

with Outperform ratings, saying that "disruptive growth" could continue for several years. The price target is estimated at $95 and $15, respectively. Analyst Jeff Johnson expects DexCom to be among the fastest growing companies in "all of medical technology over coming years" and believes the company could "potentially triple its revenue base between 2015 and 2020." DexCom's shares are currently trading at a significant premium to its medtech peers. However, Johnson believes that this premium is "warranted by the disruptive growth and numerous catalysts that seem to be lining up for the company over the next few years." In the report Baird noted, "We see a multi-year path to 30%+ annual revenue growth for TNDM as the company's differentiated pump technology and new product launches drive continued share gains and pump turnover tailwinds begin to contribute late next year." While there were investor concerns surrounding competition and the company's business model, Johnson believes that "the former is overblown and latter can be addressed over time," and added that this could make the recent pullback in the company's stock appear "overdone."