After a strong run that sent shares of Insulet Corporation PODD up 50 percent over the last year, BTIG analyst Sean Lavin finally sees shares as fairly valued. This pushed him to downgrade Insulet to a Neutral rating.
“We do not feel a reasonable revenue multiple would provide us with a price target with another 15% of upside from here and thus our rating must move to Neutral," Lavin wrote in a note. "This said, management seemed very confident at ADA and as we mention in our preview today, a strong Q2 would not surprise us."
All About The Valuation
Lavin is still very confident in Insulet’s management team as they continue to beat his expectations.
“Our downgrade is entirely based on valuation, with PODD currently trading at ~6.5x EV/Sales on a next twelve month basis, just over 1 standard deviation over its historical average of 5.4x,” he noted.
Shares of Insulet were down 1.46 percent at $49.97 during Monday’s trading session.
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