Should Tandem Diabetes Stock Stay in Your Portfolio Now?

Tandem Diabetes Care, Inc. TNDM is driving transformative innovation to help reduce the burden and create new possibilities for people living with diabetes. Its strong focus on overseas expansion is another positive. Additionally, favorable trends in the diabetes market position the company well for growth in the upcoming quarters. However, the ongoing macroeconomic volatilities and tough competitive space pose risks for Tandem Diabetes’ operations.

In the past year, this Zacks Rank #3 (Hold) stock fell 56.4% compared with 12.1% decline of the industry. However, the S&P 500 composite has risen 12.5% during the same period.

The renowned medical device company has a market capitalization of $1.57 billion. Tandem Diabetes projects an estimated earnings growth rate of 44.5% for 2026, outpacing the industry’s 20.8% growth. In the trailing four quarters, TNDM has surpassed earnings estimates twice and missed on the other two occasions.

Let’s delve deeper.

Tailwinds for TNDM Stock

Impressive Product Innovation Continues: Tandem Diabetes' flagship t:slim X2 insulin pump software, launched in 2023 in the United States, became compatible with Dexcom G7 and with Dexcom G6 Continuous Glucose Monitoring systems in 2024. Following this development, the t:slim X2 was approved for sale by Canada Health. It is also compatible with Eli Lilly and Company’s Lyumjev — an ultra-rapid-acting insulin in the European Union. Additionally, the t:slim X2 insulin pump became the first pump in the United States to be integrated with the FreeStyle Libre 2 Plus sensor from Abbott.

The latest addition to the pump platform portfolio, Tandem Mobi, is leading the way in creating a whole new category of devices for insulin therapy. A new Mobi feature is in active development, which includes a unique cartridge option that allows the pump to be worn as a tubeless patch without an infusion set, providing even greater options in wearability. Additionally, the company expanded its digital technology solutions with the launch of Tandem Source, designed to display diabetes therapy management data, in the United States in 2023. Per the latest update, the company’s extended-wear infusion set technology, Steadi-Set, is currently under review by the FDA.

Focus on International Markets: In the first quarter of 2025, the company’s sales outside the United States increased 35.4% year over year, benefiting from the demand for the t:slim pump platform and early positive momentum for renewals. Tandem Diabetes shipped approximately 11,000 pumps in 25 markets outside the United States. The company is focusing on returning to a meaningful growth rate. By bringing in new commercial and international leadership with global diabetes experience, it is furthering its strategy to bring the benefits of its technology to more people worldwide. In highly competitive regions, Tandem Diabetes has a strong presence with its distinguished t:slim X2 with Control-IQ technology. Additionally, the company is working on aligning its technology offerings outside the United States more closely with its U.S. portfolio. It is working through regulatory and localization efforts to offer Mobi outside the United States.

Diabetes Market Boom: An aging population, unhealthy lifestyle, rising awareness and higher expenditure in healthcare are likely to continue driving the highly competitive diabetes market. The company estimates more than 5 million people live with type 1 diabetes, of whom approximately 2 million reside in the United States. Also, nearly 2.5 million people in the country live with type 2 diabetes and require intensive insulin therapy.

In the near and long term, TNDM aims to strategically expand the adoption of the insulin pump by type 1 and type 2 diabetic patients across all its markets. The Tandem Diabetes team is actively working on its product launch and commercial strategy to progress in the type 2 diabetes space as well. Following the FDA's recent clearance of the company’s Control IQ+ technology for adults with type 1 diabetes, it is now cleared for adults living with type 2 diabetes.

Challenges for TNDM Stock

Macroeconomic Headwinds Persist: The uncertainties related to the current global economic and political conditions could be challenging for the company to accurately predict the demand for its products. Many of the jurisdictions in which Tandem Diabetes sells its products have experienced unfavorable general economic conditions, which could increase its expenses, including unpredictable variability in commodity prices, wage increases and inflation. Additionally, tough macroeconomic conditions could lead customers to cut back on non-essential purchases, potentially delaying demand for the company’s products.

Tough Competitive Pressure: Tandem Diabetes operates in a highly competitive environment, with players ranging from large multinational corporations to start-ups. Also, the competitive and regulatory conditions in the markets where it operates restrict the company’s ability to switch to strategies like price increases. Meanwhile, several companies have been developing and marketing their own insulin delivery systems and related software applications, which may affect the company’s business and operating results.

TNDM Stock Consensus Trend

The Zacks Consensus Estimate for Tandem Diabetes’ 2025 loss per share currently stands at $1.37, indicating a year-over-year improvement of 28.3%.

The Zacks Consensus Estimate for the company’s 2025 revenues is pegged at $1.01 billion. This suggests a 10.5% increase from the year-ago reported number.

Key Picks

Some better-ranked stocks in the broader medical space are Phibro Animal Health PAHC, Prestige Consumer Healthcare PBH and Inspire Medical Systems INSP.

Phibro Animal Health has an estimated long-term earnings growth rate of 26.2% compared with the industry’s 15.9%. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 30.6%. Its shares have rallied 26.3% compared with the industry’s 10% growth in the past year.

PAHC carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Prestige Consumer Healthcare, currently carrying a Zacks Rank #2, has an earnings yield of 5.4% compared with the industry’s flat yield. Shares of the company have rallied 30.3% compared with the industry’s 10% growth. PBH’s earnings surpassed estimates in three of the trailing four quarters and matched on one occasion, the average surprise being 2.8%.

Inspire Medical Systems, carrying a Zacks Rank #2 at present, has an estimated long-term earnings growth rate of 28.9% compared with the industry’s 25.2%. Shares of the company have fallen 9.5% against the industry’s 19.6% growth. INSP’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 356.9%.

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This article originally published on Zacks Investment Research (zacks.com).

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