Insulet is the IBD Stock Of The Day as excitement around the company's new insulin pump, Omnipod 5, drives PODD stock closer to a breakout.
The second quarter was an Omnipod 5 story. Chief Executive James Hollingshead called it "the game changer we thought it would be," on the company's earnings conference call. Omnipod 5 is a wearable insulin pump that automatically adjusts insulin delivery based on a patient's glucose levels. It's Insulet's first tubeless device and integrates with Dexcom's continuous glucose monitor.
Insulet launched Omnipod 5 on a limited basis in the U.S. during the quarter. But it represented more than a quarter of all new customer starts. About 80% of new customers previously used multiple daily injections of insulin to control their glucose. Further, some existing patients are updating to the 5.
"And to me that's a great sign of demand because what it shows is that patients who are already on the Omnipod experience, we know they've been waiting for Omnipod 5," he said. "And so we're actually, I think, getting a somewhat higher percentage of conversions already."
PODD stock is nearing a buy point at 280.46 out of a double-bottom base, according to MarketSmith.com. Shares retook their 200-day moving average earlier this month and have stayed above their 50-day line since mid-June.
PODD stock was off fractionally to close at 268.61 on stock market today.
Omnipod Drives PODD Stock Higher
During the quarter, sales of all Omnipod devices climbed more than 18% to $285.8 million. That beat PODD stock analysts' forecast for $276.9 million, according to FactSet. In constant currency, sales jumped more than 22%.
U.S. sales grew 30.5% on a strict, as-reported basis. Internationally, sales fell 2.4%. BTIG analyst Marie Thibault noted Insulet is facing competition in Europe as well as continued Covid headwinds.
But "U.S. and global new patient starts once again hit record levels driven by accelerating adoption of Omnipod 5 in the U.S. as part of the limited release," she said in a report to clients. "We expect heightened, sustained demand for the first tubeless automated insulin delivery system among those using multiple daily injections and competitive (automated insulin delivery) systems."
Now, Omnipod 5 is in a full launch in the U.S. Meanwhile, Insulet is working toward full Omnipod 5 clearance in Europe, she said. Thibault kept her buy rating on PODD stock, and raised her price target to 285 from 250.
Analysts Project Steady Growth
The company also raised its full-year outlook and now expects 14%-17% growth, excluding the impact of exchange rates. That's up from Insulet's prior guidance for 12%-16% growth.
PODD stock analysts expect Omnipod sales to climb steadily over the next several years, from $1.01 billion last year to $2.52 billion in 2025. They expect the U.S. to account for the lion's share of that.
They also project an acceleration in adjusted earnings. Last year, Insulet earned 24 cents per share. By 2025, the Street calls for per-share profit of $3.40.
PODD stock also has a strong Relative Strength Rating of 88. That lands shares in the top 12% of all stocks in terms of 12-month performance, according to IBD Digital.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
