Insulet Runs Into Omnipod 5 Delay, but Our FVE Remains Unchanged

Insulet posted second-quarter results with top-line and adjusted earnings growth generally in line with our expectations, although news that the anticipated launch of Omnipod is likely to be delayed by at least a quarter until late this year sent shares down. We’re holding steady on our fair value estimate, as this type of timing issue generally doesn’t have an impact on the cash flows we’ve projected over many years. We continue to view shares as expensive. Over the last few years, Insulet has made significant progress in pursuing regulatory clearance of its automatic insulin delivery system, integrating pump control with smartphones, gathering clinical data, and shifting access over to the pharmacy channel. All of these factors have reinforced our favorable view of Insulet’s competitive strengths and its narrow economic moat. We anticipate commercialization of Omnipod 5 in 2022 should accelerate growth at Insulet, despite the near-term regulatory delay.