Reasons to Retain Tandem Diabetes Stock in Your Portfolio Now

Tandem Diabetes Care, Inc. TNDM is well-positioned to grow in the coming quarters driven by the expanding product choices. The company’s pay-as-you-go reimbursement model could lower upfront barriers for pump starts and support higher supply revenue per customer over time. Yet, macroeconomic pressures and tough competitive risk could weigh on Tandem Diabetes’ growth.

Over the past year, this Zacks Rank #3 (Hold) stock has risen 59% against the industry’s 5.4% decline. However, the S&P 500 composite has risen 20% during the same time period.

The renowned medical device company has a market capitalization of $1.05 billion. Tandem Diabetes has an estimated long-term earnings growth rate of 35%, outpacing the industry’s 12.9% growth. TNDM surpassed earnings estimates in three of the trailing four quarters and matched on one occasion, with the average surprise being 30.9%.

Let us delve deeper.

Tailwinds for TNDM Stock

Product Roadmap Broadens Choice: Tandem’s platform strategy continues to add integrations and features that keep its installed base current while widening customer choice. In second-quarter 2026, the company submitted a 510(k) for Mobi tubeless and still targets a scaled launch in 2026, subject to FDA clearance. Dexcom G7 15-day compatibility is available for Mobi and t:slim X2 in the United States, while t:slim X2 supports Abbott FreeStyle Libre 3 Plus in seven countries outside the United States. Tandem received FDA approval of an IDE for its AIDANET fully closed-loop program and plans to begin a pivotal study later in 2026. These milestones extend the roadmap beyond current durable pumps and broaden potential competitive conversion opportunities.

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Business Model Transition Adds Levers: Tandem’s U.S. pay-as-you-go pharmacy model is designed to lower upfront pump costs while shifting economics toward recurring supply reimbursement. In second-quarter 2026, pharmacy sales reached 10% of U.S. sales, up from 6% in the first quarter, while formulary coverage reached about 45%. The model created an approximately $8 million pump revenue headwind in the quarter, but more than half of U.S. sales growth came from net favorable pricing as pharmacy supply adoption increased. The company reaffirmed its 2026 sales guidance of $1.065-$1.085 billion, gross margin of 56-57% and adjusted EBITDA margin of 5-6%. The Zacks Consensus Estimate for 2026 revenues is about $1.073 billion. Continued pharmacy adoption can support a larger recurring-revenue mix if supply conversions keep pace with pump uptake.

What Ails TNDM Stock?

Macro & Reimbursement Sensitivity: Demand for pumps and supplies remains exposed to payer coverage, patient affordability and broader economic conditions that can alter purchasing decisions. Tandem’s pay-as-you-go model lowers the upfront pump cost but defers revenues into recurring supplies. In second-quarter 2026, pharmacy pump shipments created about an $8 million revenue headwind, while pump adoption ran ahead of supply conversions. Tandem remained loss-making, with a $21.2 million GAAP net loss in second-quarter 2026. Slower reimbursement adoption or higher inflation-related costs could extend the path to sustained profitability and cash generation.

Tough Competitive Pressure: Tandem operates in a fast-changing insulin delivery market where rivals can use broader distribution, pricing incentives and new device features to influence payer and patient choices. The company states that adoption of GLP-1 drugs has likely weighed on the insulin therapy market since 2023.  If competing products gain share or arrive sooner, Tandem may need greater commercial spending or pricing support, which could limit margin expansion and slow new customer growth.

TNDM Stock Estimate Trend

The Zacks Consensus Estimate for Tandem Diabetes’ 2026 loss per share currently stands at 72 cents compared with the year-ago quarter’s loss of $2.58.

The consensus estimate for the company’s 2026 revenues is pegged at $1.08 billion. This suggests a 6% increase from the year-ago reported number.

Key Picks

Some better-ranked stocks in the broader medical space are Globus Medical GMED, Veracyte VCYT and Illumina ILMN.

Globus Medical has an earnings yield of 5.8% against the industry’s negative 1.7% yield. Its earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 27.9%. GMED’s shares have rallied 42.3% against the industry’s 6.3% decline over the past year.

GMED sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Veracyte, sporting a Zacks Rank of 1 at present, has an earnings yield of 4.6% against the industry’s negative 1.7% yield. Shares of the company have risen 38% against the industry’s 6.3% decline. VCYT’s earnings outpaced estimates in each of the trailing four quarters, with the average surprise being 41.8%. 

Illumina, presently carrying a Zacks Rank #2 (Buy), has an estimated long-term earnings growth rate of 13% compared with the industry’s 23% growth. Its earnings beat estimates in each of the trailing four quarters, with the average surprise being 9.7%. ILMN’s shares have rallied 194.6% compared with the industry’s 24.6% growth over the past year.

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This article originally published on Zacks Investment Research (zacks.com).

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