Insulet Valuation Attractive Despite Growth Reset Risk, RBC Says

MT Newswires Live
08/07

Insulet's (PODD) execution challenges in serving Type 2 diabetes patients, upcoming competition in patch pumps and uncertainty around its long-term growth outlook warrant a reset, though the stock's valuation remains attractive, RBC Capital Markets said in a note.

The company lowered its full-year US Omnipod growth outlook to 17% to 19% from 20% to 22% and expects Q3 at 14% to 16%, which came below the consensus estimate of 19.9%.

RBC said in a Wednesday note that the forward outlook is the main story, but the double-digit profile is still intact, adding that it sees an execution challenge in the first 90 days of onboarding where T2 patients face steeper learning curves, higher comorbidities, and a 60% Medicare/Medicaid payer mix.

The brokerage also noted that Insulet plans to revisit the assumptions underpinning its long-term revenue outlook on its Q4 earnings call, introducing near-term uncertainty as the company reassesses its roughly 20% long-range revenue growth target.

RBC maintained its outperform rating on the stock and cut its price target to $160 from $245.

Shares of Insulet were up 2.4% in Thursday trading.

Price: 136.46, Change: +3.20, Percent Change: +2.40

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