Should You Continue to Retain Insulet Stock in Your Portfolio Now?

Insulet Corporation’s PODD rapid progress with its strategic imperatives on Omnipod platform is poised to help it grow in the upcoming quarters. The largely untapped diabetes market also presents promising opportunities to grow, both in Type 1 and 2 indications. Besides, a sound financial position bodes well for the stock. Meanwhile, adverse macroeconomic impacts as well as reliance on a single platform raise concerns for Omnipod’s operations.In the past year, this Zacks Rank #3 (Hold) stock has increased 36%, outperforming the industry’s 36% growth and S&P 500 composite’s gain of 32%.The developer, manufacturer and distributor of insulin delivery systems has a market capitalization of $17.56 billion. PODD’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 3.41%.Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.Let’s delve deeper.Upsides for Insulet‘Awareness’ and ‘Innovation’ Strategies Bode Well:  The first of Insulet’s key strategic initiatives is to increase the access and awareness of Omnipod products. In November 2024, the company announced Omnipod 5’s compatibility with Abbott’s FreeStyle Libre 2 Plus CGM sensor in the United States. The company has also fully launched the Omnipod 5 iOS app in the United States.  Earlier to that, the company announced the full market release of Omnipod 5 with Dexcom's G7 in the United States. Insulet noted that, G7 customers have started to consistently meet the company’s target. Further, Omnipod DASH is driving strong new customer starts in the U.S. type 2 diabetes market.The second one focuses on delivering consumer-focused innovation. In the third quarter of 2024, the FDA cleared Omnipod 5 for use by people with type 2 diabetes (aged 18 years and above), expanding the technology to nearly 6 million insulin-requiring people in the United States. This year, the company will expand on the Omnipod 5 platform by bringing new sensor integrations, launching the system in new geographies, and extending the phone control offering.High Potential in Underpenetrated Diabetes Market: Approximately 40% of the Type 1 diabetes population in the United States and even less of the international type 1 diabetes population use insulin pump therapy. Furthermore, an even smaller portion of the U.S. and international insulin-intensive type 2 diabetes population use insulin pump therapy. The combined patient population using either intensive insulin therapy or basal insulin is roughly three times the size of the type 1 population. These factors, therefore, present a significant available market for its Omnipod platform globally. Overall, Insulet sees massive market opportunities, both in furthering type 1 MDI penetration as well as the type 2 market.Image Source: Zacks Investment ResearchStrong Solvency but Leveraged Balance Sheet: Insulet exited the third quarter of 2024 with cash and cash equivalents of $903 million and current debt of $42 million. This robust financial stability appears highly promising, especially during the prolonged period of macroeconomic issues.  Long-term debt of $1.36 billion remained marginally in line with the 2024 second-quarter figure. Debt-to-capital stood at 55.6X at the quarter end, indicating a highly leveraged balance sheet despite a 5.6% sequential improvement. Meanwhile, times interest earned improved 0.4% sequentially to 8.3X.Concerns for InsuletEconomic Uncertainty Hampers Growth: The continuing worldwide macroeconomic and geopolitical uncertainty may reduce demand for Insulet’s products, intensify competition, exert pressure on prices, dent supply, and lengthen the sales cycle.  The company faces challenges stemming from the global supply chain disruption, while its sole reliance on third-party suppliers, especially in China, could face potential risks from political or financial instability and labor unrest, among others. We are particularly cautious as growth could moderate further if the economic scenario worsens. While expanding into new markets with Omnipod 5, the company must navigate the impact of currency fluctuations on its financial performance.Sole Reliance on Omnipod System: Insulet’s financial results continue to largely depend on the performance of its lead product — Omnipod System. Per the company, any adverse changes in the market acceptance of the product or worsening of the factors that negatively influence the sale will dent the company’s financials majorly.PODD Stock Estimate TrendThe Zacks Consensus Estimate for Insulet’s 2024 earnings per share (EPS) has decreased 5.6% in the past 30 days.The Zacks Consensus Estimate for the company’s 2024 revenues is pegged at $2.06 billion. This suggests a 21.1% rise from the year-ago reported number.Key PicksSome better-ranked stocks in the broader medical space are Haemonetics HAE, Boston Scientific BSX and Phibro Animal Health PAHC.Haemonetics has an earnings yield of 5.41% compared with the industry’s 1.75%. Haemonetics’ earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed on one occasion, the average surprise being 2.82%. Its shares have risen 1.5% compared with the industry’s 20.9% growth in the past year.HAE carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Boston Scientific, carrying a Zacks Rank #2 at present, has a long-term estimated earnings growth rate of 13.8%. Shares of the company have surged 65.7% compared with the industry’s 21% growth. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.29%.Phibro Animal Health, carrying a Zacks Rank #2 at present, has an estimated earnings growth rate of 35.3% for fiscal 2025 compared with the industry’s 11.1%. Shares of the company have risen 81.2% compared with the industry’s 14.5% growth over the past year. PAHC’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 25.47%.Free Today: Profiting from The Future’s Brightest Energy SourceThe demand for electricity is growing exponentially. At the same time, we’re working to reduce our dependence on fossil fuels like oil and natural gas. 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Click to get this free report Boston Scientific Corporation (BSX): Free Stock Analysis Report Haemonetics Corporation (HAE): Free Stock Analysis Report Insulet Corporation (PODD): Free Stock Analysis Report Phibro Animal Health Corporation (PAHC): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks