Will Tandem Diabetes Care Experience a COVID-19 Slowdown?
Growth has come easily for Tandem Diabetes Care (NASDAQ: TNDM) in recent years. The insulin pump developer grew revenue from $107 million in 2017 to $362 million in 2019. Margins have also improved as the business has scaled. Gross profit soared from $44 million to $194 million in that span, while a full-year 2019 operating loss of $17 million marked a significant improvement from prior years.
Investors are likely pretty familiar with that story line by now. Less often discussed are the finer details describing how Tandem Diabetes Care has achieved its spectacular growth trajectory.
For example, sales to third-party distributors represented 76% of total revenue in 2019. Meanwhile, individuals with type 1 diabetes or type 2 diabetes are more vulnerable to severe infections from the SARS-CoV-2 virus, which might make them less likely to visit their doctors -- a requirement to begin pump therapy. Will the new realities of the coronavirus pandemic and the dynamics of product distribution derail this growth stock in 2020?
Source Fool.com
