Truist Securities has adjusted its valuation of Tandem Diabetes Care, raising its price target to $27 from $24 while maintaining a Hold recommendation on the medical device company's stock. The shares are trading at $25.15 and have climbed 73% over the past six months. InvestingPro analysis referenced in reports suggests the stock remains priced above its Fair Value.
Truist pointed to Tandem's fourth-quarter performance as the catalyst for the target change. The firm highlighted a quarterly beat driven by stronger traction in pharmacy channels and increased U.S. pump shipments. Those factors, along with record global pump shipments reported by the company, contributed to the outperformance for the period.
Tandem is executing a deliberate shift in its commercial approach, moving a larger share of sales through pharmacy distribution. Management has set a target of transitioning 80% of the installed base to pharmacy channels over a two- to three-year timeframe. Truist emphasized that the structural change is meaningful to its financial modeling and carries multiple moving parts that affect near-term results.
The broker noted that the transition toward pharmacy channels is expected to press down revenue for fiscal 2026 relative to prior levels. However, Truist also signaled that the company could see higher revenue and improved profitability in years after 2026 as the new channel mix matures. To derive the $27 price objective, the analyst applied a slightly higher valuation multiple, reflecting the potential longer-term benefits of the business-model change.
Truist added that additional upside to the stock will depend on the pace at which pharmacy channel adoption accelerates. The firm left its Hold rating unchanged despite raising the price target.
Separately, the company’s reported fourth-quarter results showed revenue and earnings above expectations. Management attributed the beat in part to pharmacy operations and a shift to direct international distribution. The company said record global pump shipments underpinned a $13 million revenue beat, while adjusted EBITDA margin exceeded forecasts by 250 basis points.
For fiscal 2026, Tandem provided sales growth guidance of 5% to 7%, a range that sits below the Street consensus of roughly 8.5% referenced by market commentary. Several other sell-side firms updated their views following the results and strategic pivot: Stifel and Mizuho raised price targets to $22, Piper Sandler set a target at $21, BofA Securities upgraded the stock to Neutral from Underperform while citing the pharmacy and pay-as-you-go mix, and Baird upgraded to Outperform noting the expected mid-2026 launch of the Mobi-T insulin pump as a material positive.
Taken together, the recent beat, the shift toward pharmacy distribution, and the mix of analyst reactions point to a period of strategic transition for Tandem Diabetes. Market participants will be watching the speed of pharmacy adoption and how the company’s revenue mix evolves as the new channel strategy is implemented.