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Here's Why Insulet Corporation's Investors Are Pumped

What happened

In response to the company's upbeat third-quarter results and raised guidance, shares of Insulet Corporation (NASDAQ: PODD), a medical device maker focused on diabetes and drug delivery, rose 16% as of 11:55 a.m. EDT on Friday.

So what

Here are the key takeaways from Insulet's third quarter:

  • Revenue grew 28% to $121.8 million. That flew past management's guidance range and easily exceeded the $114.4 million in revenue that Wall Street had predicted.
  • U.S. Omnipod revenue grew 17% to $70.1 million.
  • International Omnipod revenue 70% to $32.5 million
  • Drug delivery revenue grew 19% to $19.2 million thanks to continued growth in sales of Amgen's Neulasta Onpro kit, which is powered by Insulet's technology.
  • Gross margin expanded 180 basis points to 60.5%.
  • Net loss was $2.2 million, or $0.04 per share. That was better than the $3.0 million loss in the year-ago period. It also beat market watchers' estimate of a $0.10-per-share loss.

Management expects the good times to continue into the fourth quarter. The company is projecting revenue to land between $123 million and $126 million, which represents 20% at the midpoint. This range compares favorably to Wall Street's estimate of $120.9 million. 

Image source: Getty Images.

Finally, the better-than-expected numbers caused management to raise its revenue guidance for the full year. The company now expects revenue to land between $456 million and $459 million in 2017. That represents 25% growth at the midpoint and is a nice boost from its prior outlook of $440 million to $450 million.

Given the expectation-topping results and bullish guidance, it isn't hard to figure out why shares are soaring today.

Now what

Insulet is on a roll. Including today's move, shares have risen more than 80% since the start of the year. With sales growing by double digits and margins on the rise, Insulet is getting close to finally reaching bottom-line profitability. With CEO Sullivan calling for revenue to exceed $1 billion by 2021, Insulet's shareholders should have plenty of reasons to remain bullish, even at today's lofty prices.

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Brian Feroldi has no position in any of the stocks mentioned. The Motley Fool recommends Insulet. The Motley Fool has a disclosure policy.