Insulet Earnings: Ongoing Strength in U.S. Omnipod 5 Sales Powers Stellar Third-Quarter Results

Insulet generated stellar third-quarter results that slightly exceeded our full-year expectations on the top and bottom lines. However, our fair value estimate is unchanged because our modest increases to revenue and gross margin assumptions were offset by the revised share count. Shares have become significantly undervalued in the last few months, as investors speculate about how widespread use of GLP-1s might hurt Insulet’s pump business. Despite that uncertainty, we were struck that management raised its outlook for the third time this year, especially considering the third and fourth quarters of 2022 had seen significant acceleration in sales growth, thanks to the rollout of Omnipod 5. We expect Insulet can maintain this strength in 2024 related to several new drivers. This quarter demonstrated the intangible assets that underpin Insulet’s narrow economic moat, as well as the top-flight commercial execution that has allowed the firm to shine.