Senseonics Holdings Inc (NYSEAMERICAN:SENS) has been in the headlines for the past six months as a favorite of Reddit and Robinhood users. Following the classic meme stock pattern, SENS spiked by over 1,100% in six weeks starting last December. It went from a penny stock in 2020 to a $5.27 close on Feb. 16. The months since then have been packed with volatility, including another big spike on June 4.
The difference between Senseonics and many other meme stocks, though, is that this company has real potential beyond the speculation. Senseonics produces glucose monitoring devices. Its Eversense Continuous Glucose Monitor (CGM) is making big waves in a growing market of people seeking diabetes treatment and prevention.
Currently trading around $3.90 per share, SENS stock has been rallying through much of June but still remains below that February high. Is now the time to make a move?
Senseonics’ Eversense CGM Making Waves
Senseonics is focused on its Eversense CGM system. Made up of an implanted sensor, a smart transmitter and a mobile app, Eversense was marketed as the first long-term implantable glucose sensor.
CGMs are a big deal to people suffering from diabetes. With an implanted CGM, they receive accurate real-time blood sugar data so they can dose with insulin as needed. With a CGM, there is no need for the constant pin pricks traditionally used to draw and test blood. Additionally, the transmitter’s vibrating alert and the mobile app allow for proactive glucose monitoring. An Eversense user is alerted to blood sugar issues as they happen. This helps them avoid dangerous spikes and crashes.
Most implanted CGMs are relatively short-term solutions that must be removed and replaced after one to two weeks. Senseonics’ fluorescent sensor is able to remain implanted and functioning for 90 days. On June 3, a study showed that Eversense was effective in diabetic patients for up to 180 days. The stock price soared over 40% the next day.
Pervasive Diabetes Means a Growing Market
In addition to Eversense’s long-term effectiveness, investors are excited about it and Senseonics because of their vast potential market. According to the World Health Organization (WHO), 422 million people worldwide have diabetes. The incidence of type 2 diabetes has been rising along with obesity levels.
The CDC reports that one in three American adults are pre-diabetic, meaning they are at serious risk of developing type 2 diabetes. To put a dollar figure on it, a report published in May projected the value of the global diabetes treatment industry will hit $41.71 billion by 2027. The largest market for that spending will be North America.
Of course, a market of this size is going to bring competition. According to The Wall Street Journal, there are currently more than 200 companies working on blood glucose monitoring technology. That’s a risk for the company and for SENS stock. However, with 180-day use pending regulatory approval, Senseonics is in a comfortable position.
And Then There’s the Wellness Market
Diabetes is one thing. But an aging population at increased risk is also concerned about pre-diabetes. Some people are experimenting with CGMs, treating them like a fitness tracker to see real-time results of various foods and exercise on their blood sugar levels.
Michael Snyder is a genetic professor at Stanford. He had this to say about “healthy” people using a CGM as a preventative measure:
“The nice thing about using a C.G.M. is that it’s an early way of catching what’s going on, and it gives you a chance to change your behavior before you’re diabetic.”
Senseonics isn’t chasing this market, but it’s there should the company decide it’s worth looking at.
Bottom Line on SENS Stock
The big knocks against SENS stock are meme stock volatility and competition. I can’t do much about the meme stock situation; it is what it is. In terms of competition, though, Senseonics has the advantage of technology leadership in the CGMs field. Additionally, their potential market is large enough for multiple players to do quite well.
This is an “A” rated stock in Portfolio Grader. The company has revenue coming in, with $2.85 million in the first quarter and guidance of $12 million to $15 million for 2021 totals. Senseonics also has $178.6 million in cash and cash equivalents to carry it into wide stream marketing and adoption of Eversense. If you’re willing to live with some inevitable short-term volatility, the long-term prospects for SENS stock look promising.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
Louis Navellier, who has been called “one of the most important money managers of our time,” has broken the silence in this shocking “tell all” video… exposing one of the most shocking events in our country’s history… and the one move every American needs to make today.