Log in here
PODD
Insulet, lower target price
🎯💉➡️📈 $133
12 month free cashflow +$180m ⬆️
August 16th, 2020
⏰ 1 minute read
⏰ 1 minute read
Sales
Sales growth was higher +28% compared to a year ago in 2Q which is 6% above our forecast & above the averages 27% growth the last 12 months. Pod sales were up +26% while insulin jumped by +49%. The company expects up to 19% sales growth ahead & we predict slightly higher +20% in the next 1/ months to $991m.
Cashflow
Cashflow in the 2Q was very positive at $110m excluding working capital. While the last 12 months average quarterly cashflow is at $45m. Positive cashflow has been helped by large investment gains. With our forecast for higher sales growth in the next 12 months, but neutral investment, we get a lower next 12 months average quarterly free cashflow of $35m.
Sales growth was higher +28% compared to a year ago in 2Q which is 6% above our forecast & above the averages 27% growth the last 12 months. Pod sales were up +26% while insulin jumped by +49%. The company expects up to 19% sales growth ahead & we predict slightly higher +20% in the next 1/ months to $991m.
Cashflow
Cashflow in the 2Q was very positive at $110m excluding working capital. While the last 12 months average quarterly cashflow is at $45m. Positive cashflow has been helped by large investment gains. With our forecast for higher sales growth in the next 12 months, but neutral investment, we get a lower next 12 months average quarterly free cashflow of $35m.
20% sales growth, lower cashflow, expensive, shares to decline
Balance sheet
The balance sheet has been in rising net debt because of the previous negative cashflow. Rising towards $700m. But all changed with the recent new equity issue & net debt was lower at $131m as of 2Q. With our forecast for positive cashflow ahead & no dividend, the next 12 months net debt will turn into net cash of $10m.
Profit
With fast sales growth, profit jumped to $24m in the 2Q. That’s because the cash cost ratio of net profit add depreciation & other non cash costs minus sales as a % of sales was lower at 85% bringing the 12 months ratio to 93%. We use an average 89% to predict 171% jump in 12 months profit to $76m.
Value
PODD current market value is at $13.3bn. That’s 13.4X our sales forecast, 8.6X the value of the total assets & 20.8X the equity with a profitability of 11.9%. That’s quite expensive. Yield is forecast at 0%. We use our 1.6% cashflow valuation with a 0% discount because of the fast growth which gives a much lower target price of $133.8
The balance sheet has been in rising net debt because of the previous negative cashflow. Rising towards $700m. But all changed with the recent new equity issue & net debt was lower at $131m as of 2Q. With our forecast for positive cashflow ahead & no dividend, the next 12 months net debt will turn into net cash of $10m.
Profit
With fast sales growth, profit jumped to $24m in the 2Q. That’s because the cash cost ratio of net profit add depreciation & other non cash costs minus sales as a % of sales was lower at 85% bringing the 12 months ratio to 93%. We use an average 89% to predict 171% jump in 12 months profit to $76m.
Value
PODD current market value is at $13.3bn. That’s 13.4X our sales forecast, 8.6X the value of the total assets & 20.8X the equity with a profitability of 11.9%. That’s quite expensive. Yield is forecast at 0%. We use our 1.6% cashflow valuation with a 0% discount because of the fast growth which gives a much lower target price of $133.8
