We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
3 Reasons to Hold DexCom (DXCM) Stock in Your Portfolio
Read MoreHide Full Article
DexCom, Inc. (DXCM - Free Report) is well-poised for growth in the coming quarters, backed by its strong product portfolio. A robust third-quarter 2022 performance, along with a series of favorable coverage decisions, is expected to contribute further. However, stiff competition and reimbursement risks persist.
So far this year, this Zacks Rank #3 (Hold) stock has lost 15.7% compared with a 33.7% decline of the industry and a 20.9% decline of the S&P 500.
This renowned medical devices company and provider of continuous glucose monitoring (CGM) systems has a market capitalization of $44.55 billion. The company projects 31.4% growth for the next five years and expects to maintain its strong performance. DexCom’s earnings surpassed the Zacks Consensus Estimate in one of the trailing four quarters, missed the same in two and matched estimates in one, delivering a negative earnings surprise of 10.07%, on average.
Image Source: Zacks Investment Research
Let’s delve deeper.
Strong Product Portfolio: We are upbeat about DexCom's continued strength in its CGM products. It launched an updated sensor algorithm in five countries during the third quarter, making the latest G7 sensor technology available for international markets. The company anticipates FDA clearance for G7 sensor technology before 2022-end. The company, in August, announced the availability of the easy-to-use Dexcom ONE real-time CGM System on prescription via the NHS England, Wales, Scotland and Northern Ireland drug tariff to everyone with type 1 or type 2 diabetes using insulin.
DexCom’s prospects in alternative markets such as non-intensive diabetes management, hospital, gestational, pre-diabetes and obesity are likely to provide it a competitive edge in the MedTech space.
Positive Coverages: DexCom's products have been receiving increasing coverage over the past few months, raising our optimism. The company, in June, announced that people with type 1 and type 2 diabetes aged two years and above on multiple daily injections of insulin (three or more) or who use an insulin pump may now be eligible for public coverage of the Dexcom G6 CGM System via Prince Edward Island’s Diabetes Glucose Sensor Program.
The Ontario government started coverage for the Dexcom G6 CGM System through Ontario’s Assistive Devices Program for people with type 1 diabetes living in the province who are above the age of 2 years and meet coverage criteria in March.
Strong Q3 Results: DexCom’s solid third-quarter 2022 revenues buoy optimism. Rising volumes across all channels, along with strong new customer additions, owing to increasing global awareness of the benefits of real-time CGM, contributed to the upside. Impressive contributions from the Sensor segment and domestic and international revenue growth were key catalysts. DexCom also received CE Mark for an updated sensor algorithm, making the latest G7 sensor technology available for international markets.
Downsides
Reimbursement Risk: Reimbursement risk is somewhat high due to the efforts to control healthcare expenses. The company noted that most type 1 patients (above 65) pay 100% of their CGM costs from their own pockets. Unless payers (both government and private insurers) are provided with sufficient coverage and reimbursement, commercial success for DexCom will be limited, in our view.
Stiff Competition: The market for blood glucose monitoring devices is highly competitive, subject to rapid change and significantly affected by new product introductions. DexCom’s competitors manufacture and market products for the single-point finger stick device market and collectively account for substantially all worldwide sales of self-monitored glucose testing systems, currently.
Estimate Trend
DexCom is witnessing a positive estimate revision trend for 2022. In the past 30 days, the Zacks Consensus Estimate for its earnings has moved 1.3% north to 80 cents.
The Zacks Consensus Estimate for the company’s fourth-quarter 2022 revenues is pegged at $810.3 million, suggesting a 16.1% improvement from the year-ago quarter’s reported number. The same for earnings per share stood at 28 cents, implying 64.7% growth year over year.
The Zacks Consensus Estimate for ShockWave Medical’s earnings per share is stable at $2.57 for 2022 and rose from $3.42 to $3.56 for 2023 in the past 60 days. SWAV has gained 43.1% so far this year.
ShockWave Medical delivered an earnings surprise of 146.1%, on average, in the last four quarters.
Estimates for AMN Healthcare Services have improved from earnings of $11.26 to $11.43 for 2022 and $8.30 to $8.39 for 2023 in the past 60 days. AMN stock has declined 1.6% so far this year.
AMN Healthcare Services delivered an earnings surprise of 10.96%, on average, in the last four quarters.
McKesson’s earnings per share estimates increased from $24.42 to $24.75 for fiscal 2023 and $26.04 to $26.40 for fiscal 2024 in the past 60 days. MCK has gained 55.2% so far this year.
McKesson delivered an earnings surprise of 4.79%, on average, in the last four quarters.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
3 Reasons to Hold DexCom (DXCM) Stock in Your Portfolio
DexCom, Inc. (DXCM - Free Report) is well-poised for growth in the coming quarters, backed by its strong product portfolio. A robust third-quarter 2022 performance, along with a series of favorable coverage decisions, is expected to contribute further. However, stiff competition and reimbursement risks persist.
So far this year, this Zacks Rank #3 (Hold) stock has lost 15.7% compared with a 33.7% decline of the industry and a 20.9% decline of the S&P 500.
This renowned medical devices company and provider of continuous glucose monitoring (CGM) systems has a market capitalization of $44.55 billion. The company projects 31.4% growth for the next five years and expects to maintain its strong performance. DexCom’s earnings surpassed the Zacks Consensus Estimate in one of the trailing four quarters, missed the same in two and matched estimates in one, delivering a negative earnings surprise of 10.07%, on average.
Image Source: Zacks Investment Research
Let’s delve deeper.
Strong Product Portfolio: We are upbeat about DexCom's continued strength in its CGM products. It launched an updated sensor algorithm in five countries during the third quarter, making the latest G7 sensor technology available for international markets. The company anticipates FDA clearance for G7 sensor technology before 2022-end. The company, in August, announced the availability of the easy-to-use Dexcom ONE real-time CGM System on prescription via the NHS England, Wales, Scotland and Northern Ireland drug tariff to everyone with type 1 or type 2 diabetes using insulin.
DexCom’s prospects in alternative markets such as non-intensive diabetes management, hospital, gestational, pre-diabetes and obesity are likely to provide it a competitive edge in the MedTech space.
Positive Coverages: DexCom's products have been receiving increasing coverage over the past few months, raising our optimism. The company, in June, announced that people with type 1 and type 2 diabetes aged two years and above on multiple daily injections of insulin (three or more) or who use an insulin pump may now be eligible for public coverage of the Dexcom G6 CGM System via Prince Edward Island’s Diabetes Glucose Sensor Program.
The Ontario government started coverage for the Dexcom G6 CGM System through Ontario’s Assistive Devices Program for people with type 1 diabetes living in the province who are above the age of 2 years and meet coverage criteria in March.
Strong Q3 Results: DexCom’s solid third-quarter 2022 revenues buoy optimism. Rising volumes across all channels, along with strong new customer additions, owing to increasing global awareness of the benefits of real-time CGM, contributed to the upside. Impressive contributions from the Sensor segment and domestic and international revenue growth were key catalysts. DexCom also received CE Mark for an updated sensor algorithm, making the latest G7 sensor technology available for international markets.
Downsides
Reimbursement Risk: Reimbursement risk is somewhat high due to the efforts to control healthcare expenses. The company noted that most type 1 patients (above 65) pay 100% of their CGM costs from their own pockets. Unless payers (both government and private insurers) are provided with sufficient coverage and reimbursement, commercial success for DexCom will be limited, in our view.
Stiff Competition: The market for blood glucose monitoring devices is highly competitive, subject to rapid change and significantly affected by new product introductions. DexCom’s competitors manufacture and market products for the single-point finger stick device market and collectively account for substantially all worldwide sales of self-monitored glucose testing systems, currently.
Estimate Trend
DexCom is witnessing a positive estimate revision trend for 2022. In the past 30 days, the Zacks Consensus Estimate for its earnings has moved 1.3% north to 80 cents.
The Zacks Consensus Estimate for the company’s fourth-quarter 2022 revenues is pegged at $810.3 million, suggesting a 16.1% improvement from the year-ago quarter’s reported number. The same for earnings per share stood at 28 cents, implying 64.7% growth year over year.
DexCom, Inc. Price
DexCom, Inc. price | DexCom, Inc. Quote
Zacks Rank & Stocks to Consider
Currently, DexCom carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are ShockWave Medical (SWAV - Free Report) , AMN Healthcare Services (AMN - Free Report) and McKesson (MCK - Free Report) , all carrying a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for ShockWave Medical’s earnings per share is stable at $2.57 for 2022 and rose from $3.42 to $3.56 for 2023 in the past 60 days. SWAV has gained 43.1% so far this year.
ShockWave Medical delivered an earnings surprise of 146.1%, on average, in the last four quarters.
Estimates for AMN Healthcare Services have improved from earnings of $11.26 to $11.43 for 2022 and $8.30 to $8.39 for 2023 in the past 60 days. AMN stock has declined 1.6% so far this year.
AMN Healthcare Services delivered an earnings surprise of 10.96%, on average, in the last four quarters.
McKesson’s earnings per share estimates increased from $24.42 to $24.75 for fiscal 2023 and $26.04 to $26.40 for fiscal 2024 in the past 60 days. MCK has gained 55.2% so far this year.
McKesson delivered an earnings surprise of 4.79%, on average, in the last four quarters.