JP Morgan Bullish On Insulet, Forecasts Robust Pump Market with Long Runway for Growth

J.P. Morgan reiterates its Overweight rating on Insulet Corp PODD after it hosted several investor meetings with Insulet’s CFO Wayde McMillan and Head of Investor Relations Deb Gordon. 

With shares trading at ~8-9x NTM EV/Sales vs. what has historically been solidly double-digits for Insulet. 

With visibility to positive estimate revisions in 2024+, analyst Robbie Marcus sees this as an attractive entry point for investors looking to capitalize on the company’s durable long-term competitive advantage while GLP-1 fears are weighing on the stock. 

JP Morgan feels confident in an estimate for a new patient starts in 2Q at roughly ~20,400 in the US – a record. 

Competitive switches have also stayed above the historical trend for several quarters now, with a split of roughly 25% of new starts in 2Q. 

For individuals with Type 1 diabetes, the journey is far from mature, and the adoption rates among those with Type 2 diabetes remain notably low. The analysts project that roughly 60% of the approximately 2 million Type 1 patients in the U.S. continue to rely on Multiple Daily Injections, indicating a Type 1 penetration rate of around 35-40% in the U.S. 

However, this is poised to increase to more than 70% over the foreseeable future, driven by the increasing user-friendliness, enhanced intelligence, and decreasing patient copayments associated with insulin pumps.

In the sphere of Pediatrics, where Insulet currently holds a commanding market share of roughly 50%, there is considerable promise for driving increased adoption moving forward. As these young patients mature, they are expected to boost overall adoption rates significantly.

Price Action: PODD shares are down 2.71% at $208.08 on the last check Thursday.