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DexCom (DXCM) to Report Q2 Earnings: What's in the Cards?

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DexCom, Inc. (DXCM - Free Report) is scheduled to release second-quarter 2021 results on Jul 29, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 6.5%.

Q2 Estimates

Currently, the Zacks Consensus Estimate for second-quarter revenues is pegged at $547.3 million, suggesting growth of 21.1% from the year-ago reported figure. The consensus estimate for earnings stands at 43 cents per share, indicating a decline of 45.6% from the prior-year quarter.

Factors to Note

DexCom’s second-quarter top line is likely to reflect increase in volumes, courtesy of new patients across all channels, and rising global awareness regarding the benefits of its real-time Continuous Glucose Monitoring (CGM).

In June, the company announced that the Dexcom G6 continuous glucose monitoring (“CGM”) system might now be eligible for provincial coverage in British Columbia, Canada through BC PharmaCare.

In the same month, DexCom launched The Global Movement for Time in Range — an awareness and education campaign to enhance the understanding and advance the adoption of time in range as the standard of care in managing diabetes.

DexCom, Inc. Price and EPS Surprise

DexCom, Inc. Price and EPS Surprise

DexCom, Inc. price-eps-surprise | DexCom, Inc. Quote

Apart from this, DexCom announced the publication and presentation of two new studies in June. Results of these studies exhibit sustained momentum for DexCom CGM, which include Journal of the American Medical Association (JAMA)-published data on additional populations who can reap the benefits from the technology.

In April, the company announced the receipt of Health Canada authorization for the Dexcom G6 CGM System to be worn on the back of the upper arm by diabetics above the age of 18. In the same month, DexCom announced that it has ended its distribution collaboration with Zkope Healthcare and is now selling the Dexcom G6 CGM system directly across the Netherlands.

These developments are anticipated to have positively impacted the company’s performance in the to-be-reported quarter.

DexCom has significant opportunity to capitalize on international markets backed by demographic trends and lifestyle in countries outside the United States and Europe. Per the company, international growth remains strong and presents lucrative prospects driven by improving global access and awareness.

In first-quarter 2021, international revenues (25% of total revenues) grew 9.8% year over year to $123.8 million. The momentum is likely to have continued in the second quarter owing to strength in both direct and distributor markets.

Improved operational discipline might have favored the second-quarter operating margin.

However, increase in operating expenses and intense competition may have weighed on the to-be-reported quarter’s performance.

What Our Quantitative Model Suggests

Per our proven model, a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here as you will see.

Earnings ESP: DexCom has an Earnings ESP of +17.78%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #4 (Sell).

Stocks Worth a Look

Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.   

HillRom Holdings, Inc. (HRC - Free Report) has an Earnings ESP of +0.56% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cerner Corporation (CERN - Free Report) has an Earnings ESP of +0.48% and a Zacks Rank of 3.

Avanos Medical, Inc. (AVNS - Free Report) has an Earnings ESP of +15.72% and a Zacks Rank of 3.