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Why Is Senseonics (SENS) Stock Heating Up Today?

  • Senseonomics' (SENS) continuous glucose monitor was approved for coverage by a big insurance provider.
  • The company had sales of just $2.5 million last quarter in a market worth $11.7 billion.
  • However, SENS stock needs to scale its efforts or be sold to a larger player.
SENS stock - Why Is Senseonics (SENS) Stock Heating Up Today?

Source: Andrew_Popov / Shutterstock.com

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.

On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.

Read More:Penny Stocks — How to Profit Without Getting Scammed

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.

Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com, tweet him at @danablankenhorn, or subscribe to his Substack.


Article printed from InvestorPlace Media, https://investorplace.com/2022/08/why-is-senseonics-sens-stock-heating-up-today/.

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