BofA Securities has revised its view of Tandem Diabetes Care (NASDAQ:TNDM), moving the stock to a Neutral rating from Underperform and lifting its price target to $30 from $15. At the time of the update, the shares traded at $18.52, implying substantial upside to the new target. An InvestingPro valuation assessment included in the broader commentary indicates the company appears undervalued on a fair value basis.
The research note cites a strategic change at Tandem as the reason for the reappraisal. Management is accelerating distribution through the pharmacy channel while shifting more of its business toward a pay-as-you-go model. BofA said this transition should make Tandem more profitable over the coming two years by improving revenue predictability and monetization per patient.
The company’s recent financials provide context for the analysts' stance. Tandem reported $1.01 billion in revenue over the last twelve months and maintains a healthy gross margin of 53%. Despite that margin profile, InvestingPro Tips highlighted that the company remains unprofitable and that consensus analyst forecasts do not expect the firm to reach profitability this year. The stock has nonetheless shown strong market momentum, rallying roughly 73% over the past six months.
BofA emphasized that the new distribution and pricing approach should support new starts and strengthen the product pipeline. In the firm’s view, Tandem’s Tobi product is at least incrementally more competitive than Mobi. The company itself signaled that its leading indicator for new starts should return to growth and that management expects revenue growth to accelerate in 2027 and beyond.
One of the more concrete projections in BofA’s analysis is a potential doubling of revenue per patient under the pay-as-you-go model. If realized, that dynamic would reduce the number of patients required to reach profitability. However, BofA also flagged execution risk and noted the presence of deferred revenue as factors investors should monitor.
Separately, Baird raised its rating on Tandem to Outperform from Neutral and increased its price objective to $30 from $18. Baird’s upgrade connects to the expected launch of the Mobi-T insulin pump, which the firm sees arriving in mid-2026. That anticipated product introduction underpins Baird’s more optimistic view of the company’s medium-term prospects.
Together, the analyst actions reflect a shift in expectations among research firms: both BofA and Baird moved to higher ratings and substantially raised price targets. Investors will be watching execution on the pharmacy rollout, the adoption of the pay-as-you-go model, and product launches such as Mobi-T as the company pursues a path to improved profitability.
Key points
- BofA upgraded Tandem to Neutral from Underperform and doubled its price target to $30, with shares trading at $18.52.
- Baird upgraded Tandem to Outperform and raised its price target to $30, citing the anticipated mid-2026 Mobi-T launch.
- Tandem reported $1.01 billion in trailing twelve-month revenue and a 53% gross margin but remains unprofitable; the stock has risen about 73% over six months.
Risks and uncertainties
- Execution risk - The move into the pharmacy channel and a new pay-as-you-go model introduce operational complexity that could affect rollout and adoption.
- Profitability timeline - Analysts do not expect the company to be profitable this year despite improved margin metrics, leaving timing uncertain.
- Deferred revenue - Existing deferred revenue and the shift in revenue recognition could complicate near-term financial performance.