Mizuho raises Tandem Diabetes Care stock price target on Q3 beat

Mizuho has increased its price target for Tandem Diabetes Care shares from $18 to $20, maintaining a Neutral rating. This decision came after the company's Q3 performance surpassed analyst expectations, driven by strong sales across various regions and product lines. International supplies benefited from reduced constraints from the prior quarter, while U.S. pumps, U.S. supplies, and international pumps all outperformed.

Adjusted gross margins were 60 basis points higher than expected, and adjusted EBITDA margin was 360 basis points above expectations. Tandem Diabetes Care reported $284 million in third-quarter revenue, surpassing Wall Street's forecast of $265.85 million. The company's growth was fueled by record pump shipments, higher margins, and international expansion.

Despite this success, management warned that slower pharmacy adoption could impact growth in 2027. Sales are expected to grow by 5% to 7% year-over-year, with both U.S. and international contributions, though headwinds are concentrated in the fourth quarter. The company anticipates adjusted EBITDA margin to remain between 5% and 6% for fiscal 2026.

Analysts project Tandem Diabetes Care to be unprofitable this year, with 12 revisions lowering earnings estimates. The stock is considered undervalued by InvestingPro analysts, and a Pro Research Report is available for further analysis.