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Piper Jaffray: Tandem Diabetes Is Entering A 'Goldilocks Period'

Piper Jaffray: Tandem Diabetes Is Entering A 'Goldilocks Period'
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Tandem Diabetes Care Inc (NASDAQ: TNDM) broke 12-month highs Monday after yet another analyst delivered a bullish outlook.

The Rating

Piper Jaffray analyst JP McKim upgraded Tandem from Neutral to Overweight and raised the price target from $8 to $13.

The Thesis

Tandem has fallen 99 percent off its 2014 all-time high, but McKim said in a Monday note that the medical device manufacturer is entering a “Goldilocks Period” of several years with a "superior" closed loop system. 

“While we missed the bottom, we believe this is just the beginning of share appreciation,” the analyst said. 

Given the FDA's mission to spur innovation and rival Medtronic PLC (NYSE: MDT)’s two-to-three-year delay in 690G, Tandem’s Basal IQ could be approved with DexCom, Inc. (NASDAQ: DXCM)’s G6 in late June, McKim said. Competing products aren’t expected for nearly two years.

“With an iCGM partner in DXCM, TNDM should always have access to the latest and greatest technology keeping them one step (or two or three steps) ahead of MDT." 

At the same time, against previous understanding, Tandem has the opportunity to sell new hardware to more than half of its install base, which has technology that's incompatible with the latest software, McKim said. 

“While we underestimated the renewal opportunity before, we now believe it is real and a meaningful driver of growth going forward." 

Price Action

Tandem Diabetes shares were soaring 20.9 percent to $10.76 at the time of publication Monday afternoon. 

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Photo courtesy of Tandem Diabetes Care. 

Latest Ratings for TNDM

Sep 2018Craig-HallumInitiates Coverage OnBuy
Sep 2018BairdDowngradesOutperformNeutral
Aug 2018BerenbergInitiates Coverage OnBuy

View More Analyst Ratings for TNDM
View the Latest Analyst Ratings

Posted-In: JP McKim Piper JaffrayAnalyst Color Upgrades Health Care Price Target Analyst Ratings General Best of Benzinga


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