Tandem Earnings: Launch of Mobi Improves Growth Profile, but Moaty Competitors Keep Pressure On

Tandem Diabetes delivered second-quarter performance that displayed considerable improvement over the prior-year period thanks to the launch of Mobi. However, after slight adjustments to our assumptions, the firm is still on track to meet our full-year projections and we’re leaving our fair value estimate intact. Despite the strong start to Mobi, we’re not yet confident that Tandem has carved out defensible competitive advantages that can be maintained over a decade to qualify for a narrow economic moat. It was only a year ago that Tandem bore the brunt of competitive pressure from both Insulet and Medtronic’s new pumps with significant differentiation. While Tandem’s situation has improved now that it has its own distinctive small, durable pump, we anticipate the rivals are likely to iterate and improve their own technology in the coming years.