TNDM Intrinsic Stock Value – Tandem Diabetes Care Fair Value Estimate of $29.47 Suggests Share Price is Undervalued at $24.54
July 4, 2023
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Tandem Diabetes Care ($NASDAQ:TNDM) is a medical device company that has developed innovative insulin delivery products and digital health solutions for people living with diabetes. Its products are designed to simplify diabetes management and improve outcomes. The company’s two stage free cash flow to equity valuation model has suggested that Tandem Diabetes Care is undervalued, with the fair value estimate being US$29.47 and the current share price of US$24.54. The two stage free cash flow to equity valuation, or DCF, approach takes into account the current share price, expected future cash flows, and the estimated growth rate for those cash flows. The DCF approach suggests that Tandem Diabetes Care is undervalued at its current share price, and thus investors can expect a positive return if they buy the stock now.
Furthermore, the company has strong fundamentals which suggest that the DCF analysis is accurate. This includes its impressive revenue growth over the past year and its strong balance sheet. As such, investors should consider investing in the company as they can expect a positive return.
Stock Price
On Monday, TANDEM DIABETES CARE stock opened at $24.6 and closed at $24.7, up by 0.5% from the previous closing price of 24.5. This modest increase occurred despite a fair value estimate of $29.47 from independent research analysts suggesting that the stock may be undervalued. This is an indication that investors are unaware of the potential for TANDEM DIABETES CARE stock to reach its full potential in the future. As such, shareholders could benefit from taking advantage of the current price disparity in order to maximize their returns. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for TNDM. More…
| Total Revenues | Net Income | Net Margin |
| 794.69 | -203.75 | -19.7% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for TNDM. More…
| Operations | Investing | Financing |
| 50.46 | 33.17 | 16.88 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for TNDM. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 954.14 | 615.39 | 6.81 |
Key Ratios Snapshot
Some of the financial key ratios for TNDM are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 26.3% | – | -15.4% |
| FCF Margin | ROE | ROA |
| 0.9% | -17.4% | -8.0% |
Analysis – TNDM Intrinsic Stock Value
At GoodWhale, we have done a comprehensive analysis of the financials of TANDEM DIABETES CARE. After our rigorous evaluation, we have determined that the intrinsic value of TANDEM DIABETES CARE share is around $102.4, calculated using our proprietary Valuation Line. We believe that investors should take note of this discrepancy and consider adding TANDEM DIABETES CARE to their portfolios. More…
Peers
The market for diabetes care products is highly competitive, with major players such as Tandem Diabetes Care Inc, NuVasive Inc, Avanos Medical Inc, and Penumbra Inc vying for market share. While each company has its own strengths and weaknesses, the competition between them is fierce, and it is often the case that one company’s success comes at the expense of its rivals.
– NuVasive Inc ($NASDAQ:NUVA)
NuVasive Inc is a medical device company that develops minimally-invasive surgical products and procedures for spine surgery. The company has a market cap of 2.17B as of 2022 and a Return on Equity of -1.33%. NuVasive’s products and procedures are designed to improve patient outcomes and minimize surgical invasiveness. The company’s products are used in a variety of spine surgeries, including lumbar, thoracic, and cervical procedures.
– Avanos Medical Inc ($NYSE:AVNS)
Avanos Medical Inc is a medical technology company that focuses on developing and commercializing minimally invasive medical devices. The company has a market cap of 957.63M as of 2022 and a Return on Equity of 2.85%. Avanos’ products are used in a variety of procedures, including pain management, gastrointestinal, urological, ENT, and vascular.
– Penumbra Inc ($NYSE:PEN)
As of 2022, Penumbra Inc has a market cap of 6.49B and a Return on Equity of -2.31%. The company is a medical device company that develops, manufactures and markets products for the treatment of neurovascular diseases.
Summary
Tandem Diabetes Care is a publicly traded medical device company based in San Diego, California. The company offers insulin pumps and other diabetes management products. Using the 2 Stage Free Cash Flow to Equity model, the fair value estimate of Tandem Diabetes Care is US$29.47, indicating that the current share price of US$24.54 is undervalued. Investors should consider Tandem Diabetes Care as a potential investment opportunity as its stock is currently undervalued and has potential for capital appreciation.
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