Tandem Diabetes Earnings: Competition Continues to Press, but Mobi Launch Offers Hope

Tandem Diabetes reported fourth-quarter and full-year results that slightly exceeded our revenue projections, but also exceeded our operating expense estimates. We're leaving our $32 fair value estimate unchanged since these factors offset each other. Though Tandem has yet to dig a moat, in our opinion, shares are substantially undervalued, in our view, especially considering the longer-term potential for insulin pumps to further penetrate the Type 1 diabetes market and introduce this therapy to the Type 2 patient pool. Nonetheless, the negative impact of competitive launches of Omnipod 5 at Insulet and the 780g at Medtronic weighed on Tandem in 2024 and underscored a lack of structural factors that could insulate the firm's business. For this reason, we're not yet inclined to award Tandem a moat. We would need to see the company consistently and successfully commercialize new technology that commands a pricing premium.