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Why I Just Bought Senseonics (SENS) – A High-Conviction Add at Current Levels
I re-entered a position in Senseonics (SENS) this week, and I’m happy to put my money where my mouth is.
After their Q1 earnings and the recently completed $80 million equity raise (plus $12 million greenshoe), the stock got smacked down on Friday. That reaction created what I believe is a compelling buying opportunity in one of the most interesting long-term plays in the continuous glucose monitoring (CGM) space.
Strong Q1 Beat + Major Balance Sheet Cleanup
In their 8-K, Senseonics reported estimated Q1 revenue of approximately $11.7 million, beating consensus estimates of $9.9 million. This is especially impressive given it was their toughest quarter of the year due to the Ascensia transition, typical seasonality, and the EU launch of Eversense 365 still ramping in Q2.
Gross margin came in at a robust 54%, crushing the 45.7% consensus. Management also highlighted that margins should improve in every subsequent quarter.
On the capital side, the company dramatically strengthened its financial position:
- Raised ~$92 million in new equity.
- Expanded the Hercules credit facility from $100M to $140M, with $20M immediately available on much better terms.
- The balance sheet is now in excellent shape, removing a major overhang and giving them plenty of runway to execute.
At a current market cap of roughly $300 million, the company now has significantly more cash and flexibility than it did just a few days ago.
Why the Long-Term Story Is So Compelling
The global CGM market is exploding — expected to hit $13.5 billion in 2025 and continue growing rapidly. Senseonics currently has a very small share, but their technology has several meaningful advantages, especially in accuracy during glucose lows and on-body vibration alerts.
The real game-changer is coming in 2028 with the Freedom product — a fully implantable CGM with no on-body transmitter. Market research conducted by the company showed physicians and patients giving the Freedom product a potential 26% market share once approved. That is an enormous number in this space.
Additional positives:
- First patient in the Freedom pivotal trial is now expected in September (three months ahead of schedule).
- The company is growing close to 100% and targeting gross margins north of 70% at scale.
- Consensus revenue estimates ($60M in 2026 → $212M in 2029) look conservative to me. I believe $70M+ this year and $125–150M in 2027 are realistic, with Freedom potentially blowing away 2028+ numbers.
At current levels, SENS is trading at roughly 2x–2.5x my 2027 revenue estimate — an extremely attractive valuation for a company that can grow triple-digits for the next several years while expanding margins significantly.
Bottom Line
I bought SENS because the risk/reward is now skewed heavily to the upside. They have a best-in-class (or close to it) long-term product pipeline, a cleaned-up balance sheet, strong execution, and a massive addressable market.
The stock has been weak while the fundamental setup has improved materially in the last week. I continue to view Senseonics as a core long-term holding in a micro-cap growth portfolio.