We recently published a list of The 7 Best Diabetes Stocks to Buy Now. In this article, we take a look at how Tandem Diabetes Care, Inc. (NASDAQ:TNDM) compares to other diabetes stocks.

According to the WHO, approximately 422 million people worldwide suffer from diabetes, with the majority living in low- and middle-income countries. Diabetes is directly responsible for an average of 1.5 million deaths per year. In recent decades, both the number of cases and the prevalence of diabetes have been steadily increasing. On the other hand, the International Diabetes Federation estimates that there are approximately 500 million diabetics worldwide, and this number is expected to increase by 25% by 2030 and 51% by 2045.

A special medical device called the continuous glucose monitor (CGM) is used to treat type 1 and type 2 diabetes. The market has grown significantly in recent years and has become a fast-growing area of ​​diabetes care devices. The market for advanced diabetes care products – insulin pumps, pens and continuous glucose monitoring (CGM) devices – was estimated to be worth $21.8 billion in 2023, according to GlobalData. GlobalData forecasts expect the market to reach $33.4 billion by 2030, growing at a CAGR of 6.34% during the forecast period.

According to GlobalData’s database of marketed products, the CGM category currently includes 97 products. The vast majority of these devices are traditional CGMs, with only a few implantable sensors. According to GlobalData’s database of pipeline products, 133 products are either in development or approved. The numbers show that this market segment is growing rapidly and is a hub for innovative new technologies such as implantable CGMs.

Today, CGM technology also integrates AI. For example, Roche recently introduced a new AI-based predictive CGM technology (Accu-Chek SmartGuide). At the launch, Chief Medical Officer Julien Boisdron of Roche Diabetes Care called it “a solution that is more than a CGM.” He described how the solution, which consists of two programs and a sensor, helps with both data visualization and prediction.

A new era of possibilities has dawned in the treatment of diabetes and its associated complications. These novel techniques offer significant opportunities to treat the combined problems associated with diabetes and obesity. A class of drugs called glucagon-like peptide-1 (GLP-1) agonists is used to treat obesity and type 2 diabetes mellitus (T2DM). As mentioned in our article, “The 10 Best GLP-1 and Weight Loss Stocks to Buy Now”, the GLP-1 market, which is equally driven by obesity and diabetes, is expected to reach $100 billion by 2030. 30 million GLP-1 users, or about 9% of the U.S. population, could be taking the drug by 2030.

The latest KFF Health Tracking survey shows that 12% of American adults report taking a GLP-1 drug at some point. Over the past half-decade, patients with diabetes account for 43% of GLP-1 prescriptions, while 22% of patients with obesity or overweight diagnoses also take the drug. The proportion of adults who have heard “a little” or “a lot” about these drugs has increased from 70% to 82% in the past year, while the proportion who have heard “a lot” or “a great deal” about them has increased from 19% to 32%.

However, there are now difficulties due to increased demand for these diabetes and weight loss drugs. The National Pharmacy Association (NPA) warned of a possible “explosion of unlicensed drug sales on the internet”. Semaglutide under the brand name Ozempic helps people with type 2 diabetes control their blood sugar levels, but in some countries, such as in the US under the brand name Wegovy, they are also widely used to help patients lose weight.

NPA Chairman Nick Kaye said:

“Pharmacists remain deeply concerned that the current drug shortages could lead to an explosion of unlicensed drug sales on the Internet.”

Methodology:

We looked through ETF holdings related to the diabetes industry and financial media to create an initial list of 20 diabetes stocks. Then we selected the 7 stocks with the highest upside potential and a market cap of over $2 billion. The stocks are sorted in ascending order of their upside potential.

Why do we care about the stocks hedge funds invest in? The reason is simple: Our research shows that we can outperform the market by mimicking the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks each quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (See more details here)

Tandem Diabetes Care, Inc. (NASDAQ:TNDM)

Price potential according to analysts: 26.80%

The global insulin and diabetes technology provider is Tandem Diabetes Care, Inc. (NASDAQ:TNDM). The company has the Tandem Mobi and t X2 insulin delivery systems. These pumps’ software can be updated via PC, they have various infusion set options and use Management IQ technology for better glycemic management. Tandem’s pumps are compatible with multiple CGM sensors and offer a complete AID solution for the management of insulin-dependent diabetes.

According to Tandem, the t:slim system is now compatible with sensors from three different brands, an industry first. The Mobi system is now more portable and can be used without a smartphone controller. Tandem offers a range of value-added services and solutions, including decision support, reordering, reporting and platform connectivity.

Tandem claims in a recent business presentation that it has over 450,000 customers in 25 countries. This is called “scaling opportunity to renew” and is based on proven customer satisfaction. More customers mean more opportunities to renew, which leads to more new customers each quarter, creating a “virtuous circle” situation.

After releasing impressive second-quarter results and raising full-year revenue expectations, Tandem Diabetes Care, Inc. (NASDAQ:TNDM) saw its share price rise sharply by 24%.

Analysts had predicted a loss of $0.54 per share for the second quarter of 2024, but the actual loss was $0.47 per share. Quarterly revenue of $221.9 million is above the consensus estimate of $205.63 million, representing 13% year-over-year growth. Strong demand for Tandem’s latest insulin delivery technology, particularly the Tandem Mobi, which has dramatically increased its market share, was the main driver of the company’s outstanding financial performance.

While international pump shipments decreased 6% to approximately 10,000 units, Tandem shipped over 20,000 insulin pumps to the U.S. in the second quarter of 2024, a sequential increase of 33% over the first quarter of 2024.

Tandem raised its full-year 2024 revenue estimate to $885-892 million, above the analyst consensus of $868.6 million and previous forecasts. In addition, the company expects third-quarter revenue of $222-225 million, above the consensus forecast of $220.4 million.

TNDM is one of the best diabetes stocks right now as it has received a “strong buy” rating from 12 analysts. TNDM has an average price target from Wall Street analysts of $52.75, which represents an upside potential of 26.80% from the company’s current price of $41.60.

Total TNDM 3rd place on our list of the best diabetes stocks to buy. While we recognize TNDM’s potential as an investment, we believe some AI stocks promise higher returns and do so in a shorter time frame. If you’re looking for an AI stock that’s more promising than TNDM but trades at less than 5x earnings, read our report on the cheapest AI stock.

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Disclosure: None. This article was originally published on Insider Monkey.