Insulet Corporation (PODD)

Conclusion

Insulet Corporation, based in Acton, Massachusetts, develops and sells insulin delivery systems for people with insulin-dependent diabetes, mainly the Omnipod platform. The share price is 149.81 USD as of 2026-11-09, giving a market capitalisation of 10.39 billion USD.

The verdict is undervalued. The P/E is 24.23 against a ten-year median of 1004.64, and EV/EBITDA is 15.69 against a median of 147.69. The fair value band runs from 429.05 to 643.57 USD with a midpoint of 536.31 USD, a margin of safety of 258.0% at today's price. The discounted cash flow gives 13.85 USD per share at a discount rate of 10.15%, and the fair value from historical multiples is 1058.77 USD. The price implies growth of 49.97% a year in the reverse DCF, against revenue growth of 25.44% a year over five years.

What holds the case up is a return on invested capital of 22.67% against a WACC of 9.67%, revenue growth of 27.54% a year over three years, and net debt of only 0.55 times EBITDA. What would break it is weak cash generation: free cash flow conversion is 11.24% on a trailing basis, the free cash flow yield is 0.46%, and the next-year EPS estimate has been revised down 4.12% over 90 days. The DCF value sits far below the price, so the verdict depends heavily on the fair value band and the historical multiples.

Financial health

Financial strength is green, held up by a net debt to EBITDA of 0.55, an interest coverage of 10.18 and a current ratio of 2.51. The quick ratio is 1.56 and the debt to equity ratio is 0.61, both at the 30 September 2026 balance sheet. The Altman Z-score is not available because the inputs needed for it are missing, so no zone can be given. The insolvency risk is low, about 0.4% by the estimate of the Ohlson model over one to two years, based on figures as of 31 December 2025. The balance sheet gives little reason for concern, though the Ohlson estimate rests on the earlier year-end data.

Earnings quality

Earnings quality is yellow. The Piotroski score of 7 out of 9 and an accrual ratio of -0.1026 support the case, as the negative accrual ratio means reported earnings are backed by cash. Against that, free cash flow conversion is 11.24% on a trailing basis and 58.68% over five years, so recent cash generation lags profit. Stock-based compensation is 0.64% of revenue, and free cash flow after it is 27.9 million USD. The share count has grown at 1.74% a year over five years, so there are no net buybacks. The Beneish M-score is not available. The company beat earnings estimates in all 8 of the last quarters, with an average surprise of 17.48%.

Profitability

Profitability is green. The operating margin is 18.43% against a ten-year median of 6.23%, and the net margin is 13.45% against a median of 1.14%. The gross margin is 71.88% against a median of 65.36%. Operating margin stability is 0.8967. Return on invested capital is 22.67% against a WACC of 9.67%, with the given gap of 0.13 and a label that the business creates value. Return on equity is 27.15%. The DuPont split shows a net margin of 9.12%, asset turnover of 0.85 and an equity multiplier of 2.11 at the 2025 year-end, so part of the return on equity comes from leverage. Return on invested capital is the more reliable measure here.

Growth

Growth is green. Revenue has compounded at 27.54% a year over three years, 24.53% over five years and 26.22% over ten years. Revenue grew in all 10 comparable years. Earnings per share compounded at 273.83% over three years and 101.64% over five years, although these rates start from a low base. Consensus expects next-year earnings growth of 18.67%, but the next-year estimate has been revised down by 4.12% over 90 days, with 3 downgrades against 1 upgrade in the last 30 days.

Valuation

Valuation is green, and the verdict is undervalued. The P/E of 24.23 is 97.6% below its ten-year median of 1004.64. The EV/EBITDA of 15.69 is 89.4% below its median of 147.69, the P/S of 3.26 is 67.7% below its median of 10.08, and the P/B of 6.58 is 77.4% below its median of 29.05. The price to free cash flow is 215.56, with only three historical points available. The discounted cash flow gives 13.85 USD per share at a discount rate of 10.15%, with growth of 20% for the first stage and 2.5% in perpetuity. The fair value band runs from 429.05 to 643.57 USD, midpoint 536.31 USD, a margin of safety of 258.0% at 149.81 USD. The fair value from historical multiples is 1058.77 USD. The reverse DCF implies growth of 49.97% a year against 25.44% delivered over five years. The fair value is an order of magnitude built on fixed assumptions, not a price target. The company pays no dividend.

Risks

The weakest number is trailing free cash flow conversion of 11.24%, which means reported profit is not turning into cash at the rate the verdict assumes. A further fall would weaken the case that earnings are of high quality. The free cash flow yield of 0.46% and the price to free cash flow of 215.56 show how much the price relies on future cash flows. Falling next-year estimates, with a 4.12% revision over 90 days, could signal that growth expectations are being trimmed. The DCF value of 13.85 USD is far below the price, while the historical multiples point to much higher value, so the verdict is sensitive to the method used. The Altman Z-score and the Beneish M-score are not available, so two standard checks on balance sheet and earnings manipulation are missing. This analysis has no debt maturity schedule and no revenue breakdown by segment, so refinancing risk and the drivers of growth by product line cannot be assessed.