Tandem Diabetes stock rocketed, surging well above a profit-taking zone after the insulin pump-maker topped Wall Street's first quarter expectations and raised its sales outlook.
The company wrapped its March quarter with $192.8 million in adjusted sales, advancing 12% to beat the Street's call for $174.5 million. Tandem also lost 65 cents per share, but that narrowed from a year-earlier loss of $1.92 and came in lower than forecasts for a loss of 76 cents.
Chief Executive John Sheridan credited the t:slim X pump and newer Tandem Mobi — an automated, closed-loop system for insulin delivery — for growth in the quarter.
At the market close, Tandem Diabetes stock jumped 22.3% to 44.72.
Shares of the insulin pump maker broke out of a cup-with-handle base with an entry at 31.07 on March 4, MarketSurge chart analysis shows. After dipping somewhat, Tandem stock bounded off its 50-day line on April 22 and has taken off since then. The profit-taking zone is from 37.28 to 38.84.
Meanwhile, DaVita stock, which had surged above a buy zone in premarket trades, reversed and closed down 5.5% at 134.45. Shares of the dialysis center operator closed in a chase zone on Thursday after breaking out of a cup base with a buy point at 141.54. The chase zone runs up to 148.62.
Tandem Diabetes Stock: Supply Sales Jump
The lion's share of growth for Tandem came from the pump supplies. Sales of infusion sets, cartridges and other supplies catapulted 58% to $105.5 million, handily beating analysts' call for $91.4 million.
Pump sales, which includes t:slim X2 and Tandem Mobi, edged 3% higher to $87.3 million, and crushed expectations for $64.1 million.
Tandem raised its sales outlook for 2024 and now expects $868 million, just ahead of the Street's call for $865.7 million. For the second quarter, the company projects $205 million, in line with analysts' $205.1 million forecast.
Tandem Diabetes stock launched to its highest point since January 2023.
But shares of DaVita didn't hold onto their premarket surge and briefly triggered a sell rule. Investors are encouraged to cut their losses when a stock falls 7% to 8% below its entry. Shares fell as much as 7.3% below their buy point.
DaVita Stock Is Highly Rated
DaVita reported adjusted profit of $2.38 per share on $3.07 billion in sales. Profit came in well above expectations for $1.95, according to FactSet, and grew almost 51% year over year. Sales ticked nearly 7% higher to $3.07 billion and topped the Street's call for $3.03 billion.
DaVita says it's receiving more revenue per treatment than it did a year ago. In the first quarter, the company collected $384.54 per treatment, up 5%. Patient care costs per treatment — DaVita's expenses per treatment — also fell about 1%.
Importantly, the number of dialysis treatments DaVita provided overall was down just a fraction in the first quarter, at an average of 92,159 per day.
The company raised the low end of its profit outlook for the year by 30 cents and now expects to earn an adjusted $9 to $9.80 per share. At the midpoint, the new guidance is slightly short of DaVita stock analysts' forecast for $9.46. FactSet-polled analysts also call for $12.62 billion in sales, growing 4%.
Promisingly, both DaVita stock and Tandem Diabetes stock have strong Relative Strength Ratings of 95 out of a best-possible 99. This means their stocks have performed in the leading 5% of all stocks over the last 12 months, according to IBD Digital.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
