FatCamera/E+ via Getty Images Redburn Atlantic has initiated coverage of Insulet ( NASDAQ: PODD ) and Tandem Diabetes Care ( NASDAQ: TNDM ) with buy ratings, saying they will both benefit from growth in the insulin pump market. The firm has a $235 price target for Insulet (~36% upside based on May 29 close) and $60 for Tandem (~16% upside). Analysts Issie Kirby and Ed Ridley-Day say the diabetes technology market was valued at ~$14B in fiscal 2023 with a 15% CAGR over the next five years.
For the insulin pump market, they see a 13% CAGR through the end of fiscal 2028. Kirby and Ridley-Day say that Insulet ( PODD ) has benefitted tremendously from its Omnipod device, a patch pump that generates 98% of revenue. Also, based on a proprietary survey of endocrinologists, 76% said they were likely or highly likely to recommend Omnipod 5 for patients on intensive insulin therapy.
They added that Omnipod has a competitive advantage given that ~90% of them are obtained by customers through pharmacy channels, rather than durable medical equipment providers which can be cumbersome. Following the February launch of its Mobi pump device, Kirby and Ridley-Day see an 11.1% CAGR in revenue for Tandem from fiscal 2024 through the end of fiscal 2027.
They also see the company gaining a larger share of new pump starts starts both type 1 and type 2 population in fiscal 2024, to, respectively, ~38% and ~27%. In addition, Tandem ( TNDM ) is developing a patch pump, Sigi, as well as the next-generat.
