DXCM - Why Is Senseonics (SENS) Stock Heating Up Today?
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Senseonics (NYSEAMERICAN:SENS) stock jumped by over 50% after it announced its Eversense implantable glucose monitor was approved for coverage by Elevance Health (NYSE:ELV), formerly known as Anthem. Senseonics had revenue of just $2.5 million in the first quarter. SENS stock’s latest move still leaves the market cap short of $1 billion. Hidden in the first-quarter numbers, however, was growth in U.S. sales, which could now climb rapidly.
Senseonomics’ Eversense is offered in two versions: one that can run for 3 months and one that operates for 6 months. It competes with Abbott Laboratories’ (NYSE:ABT) Freestyle Libre, which lasts 14 days.
The Big Opportunity in Glucose Monitoring
The market for glucose monitors was worth $11.7 billion in 2021 and is growing at over 7% per year. It includes devices that use testing strips, lancets, and continuous meters like the Eversense.
I wrote about Senseonomics for Investorplace last December, when its stock price was at $2.67 and its market cap over $1 billion. At the time I warned about competition from Dexcom (NASDAQ:DXCM), Abbott and possibly Apple (NASDAQ:AAPL). “Senseonics has a long-running, accurate sensor, and if insurers pick it up so the price to patients drops, sales could jump,” I wrote. I called it a “good” penny stock.
Now that the first such approval has happened, hopes are running high.
What Happens Next for SENS Stock
Senseonomics still faces the challenge of scaling production, as well as marketing to doctors and patients. That’s going to be expensive, and even if it achieves its near-term goal of $150 million in sales, you’re paying five times that to own the shares.
But it is possible Senseonomics could now draw a bid from a larger company, which would reward current shareholders handsomely. That’s the speculation on which today’s run-up rests. Just be warned that investors in this company have been disappointed before.
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On the date of publication, Dana Blankenhorn held a long position in AAPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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