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Here's Why You Should Retain DexCom (DXCM) Stock For Now
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DexCom, Inc. (DXCM - Free Report) is well poised for growth in the coming quarters, backed by its strong product portfolio. A robust third-quarter 2021 performance, along with a solid international foothold, is expected to contribute further. However, stiff competition and reimbursement risks persist.
Over the past year, this Zacks Rank #3 (Hold) stock has gained 59.2% compared with 7.6% growth of the industry and 25.5% rise of the S&P 500.
The renowned medical devices company and provider of continuous glucose monitoring (“CGM”) systems has a market capitalization of $53.83 billion. The company projects 23.7% growth for 2022 and expects to maintain its strong performance. DexCom’s earnings surpassed the Zacks Consensus Estimates in three of the trailing four quarters and broke even in one, delivering an earnings surprise of 31.69%, on average.
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Let’s delve deeper.
Strong Product Portfolio: We are upbeat about DexCom's FDA-cleared CGM system – the DexCom G4 Platinum — which is significantly boosting the company’s top line. The in-built features of G4 Platinum make it the most innovative system for continuous glucose monitoring in the market. During the third quarter of 2021, the company launched Dexcom ONE, an important addition to its portfolio as DexCom progresses to widen access to healthcare for people with diabetes worldwide.
In July 2021, DexCom announced receipt of the FDA’s clearance for Dexcom Partner Web APIs. The nod is expected to enable approved third-party developers to integrate real-time CGM data into their digital health apps and devices.
Solid International Foothold: We are optimistic about DexCom’s continued focus on international markets. In third-quarter 2021, the company registered strong international year-over-year revenues. During the quarter, international growth was broad-based throughout all markets, with the majority delivering record sales in the quarter under review. DexCom’s international market expansion initiatives are all progressing according to plan, thereby driving high volume growth. Therefore, international growth remains strong and presents a great opportunity for the future, backed by improving global access and awareness.
Strong Q3 Results: DexCom’s solid third-quarter 2021 results buoy optimism. Impressive contributions from the Sensor and other revenue segment, and domestic and international revenue growth, were vital catalysts. DexCom’s prospects in alternative markets, such as the non-intensive diabetes management space, are likely to provide it a competitive edge in the MedTech space. Apart from making continued advancements concerning key strategic objectives, the company ended the quarter with new patient additions. The company’s slew of tie-ups and buyouts are encouraging. Expansion in both gross and operating margins is positive.
Downsides
Reimbursement Risk: Reimbursement risk is somewhat high due to the efforts to control healthcare expenses. The company has noted that most Type 1 patients (above 65) pay 100% of their CGM costs out of their own pockets. Unless payers (both government and private insurers) provide 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 of the worldwide sales of self-monitored glucose testing systems, currently.
Estimate Trend
DexCom is witnessing a positive estimate revision trend for 2021. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 13.4% north to $2.79.
The Zacks Consensus Estimate for the company’s fourth-quarter 2021 revenues is pegged at $692.2 million, suggesting a 21.7% improvement from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are Laboratory Corporation of America Holdings (LH - Free Report) or LabCorp, Thermo Fisher Scientific Inc. (TMO - Free Report) and AMN Healthcare Services (AMN - Free Report) .
LabCorp, flaunting a Zacks Rank #1 (Strong Buy), has an estimated long-term growth rate of 10.6%. The company’s earnings surpassed estimates in the trailing four quarters, the average surprise being 25.73%. You can see the complete list of today’s Zacks #1 Rank stocks here.
LabCorp has gained 50.3% compared with the industry’s 13.2% rise over the past year.
Thermo Fisher has an estimated long-term growth rate of 14%. The company’s earnings surpassed estimates in the trailing four quarters, the average surprise being 9.02%. It currently carries a Zacks Rank #2 (Buy).
Thermo Fisher has gained 40.7% compared with the industry’s 7.6% rise over the past year.
AMN Healthcare has an estimated long-term growth rate of 16.2%. The company’s earnings surpassed estimates in the trailing four quarters, the average surprise being 19.51%. It currently sports a Zacks Rank #1.
AMN Healthcare has gained 67.1% against the industry’s 59.6% fall over the past year.
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Here's Why You Should Retain DexCom (DXCM) Stock For Now
DexCom, Inc. (DXCM - Free Report) is well poised for growth in the coming quarters, backed by its strong product portfolio. A robust third-quarter 2021 performance, along with a solid international foothold, is expected to contribute further. However, stiff competition and reimbursement risks persist.
Over the past year, this Zacks Rank #3 (Hold) stock has gained 59.2% compared with 7.6% growth of the industry and 25.5% rise of the S&P 500.
The renowned medical devices company and provider of continuous glucose monitoring (“CGM”) systems has a market capitalization of $53.83 billion. The company projects 23.7% growth for 2022 and expects to maintain its strong performance. DexCom’s earnings surpassed the Zacks Consensus Estimates in three of the trailing four quarters and broke even in one, delivering an earnings surprise of 31.69%, on average.
Let’s delve deeper.
Strong Product Portfolio: We are upbeat about DexCom's FDA-cleared CGM system – the DexCom G4 Platinum — which is significantly boosting the company’s top line. The in-built features of G4 Platinum make it the most innovative system for continuous glucose monitoring in the market. During the third quarter of 2021, the company launched Dexcom ONE, an important addition to its portfolio as DexCom progresses to widen access to healthcare for people with diabetes worldwide.
In July 2021, DexCom announced receipt of the FDA’s clearance for Dexcom Partner Web APIs. The nod is expected to enable approved third-party developers to integrate real-time CGM data into their digital health apps and devices.
Solid International Foothold: We are optimistic about DexCom’s continued focus on international markets. In third-quarter 2021, the company registered strong international year-over-year revenues. During the quarter, international growth was broad-based throughout all markets, with the majority delivering record sales in the quarter under review. DexCom’s international market expansion initiatives are all progressing according to plan, thereby driving high volume growth. Therefore, international growth remains strong and presents a great opportunity for the future, backed by improving global access and awareness.
Strong Q3 Results: DexCom’s solid third-quarter 2021 results buoy optimism. Impressive contributions from the Sensor and other revenue segment, and domestic and international revenue growth, were vital catalysts. DexCom’s prospects in alternative markets, such as the non-intensive diabetes management space, are likely to provide it a competitive edge in the MedTech space. Apart from making continued advancements concerning key strategic objectives, the company ended the quarter with new patient additions. The company’s slew of tie-ups and buyouts are encouraging. Expansion in both gross and operating margins is positive.
Downsides
Reimbursement Risk: Reimbursement risk is somewhat high due to the efforts to control healthcare expenses. The company has noted that most Type 1 patients (above 65) pay 100% of their CGM costs out of their own pockets. Unless payers (both government and private insurers) provide 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 of the worldwide sales of self-monitored glucose testing systems, currently.
Estimate Trend
DexCom is witnessing a positive estimate revision trend for 2021. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 13.4% north to $2.79.
The Zacks Consensus Estimate for the company’s fourth-quarter 2021 revenues is pegged at $692.2 million, suggesting a 21.7% improvement from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are Laboratory Corporation of America Holdings (LH - Free Report) or LabCorp, Thermo Fisher Scientific Inc. (TMO - Free Report) and AMN Healthcare Services (AMN - Free Report) .
LabCorp, flaunting a Zacks Rank #1 (Strong Buy), has an estimated long-term growth rate of 10.6%. The company’s earnings surpassed estimates in the trailing four quarters, the average surprise being 25.73%. You can see the complete list of today’s Zacks #1 Rank stocks here.
LabCorp has gained 50.3% compared with the industry’s 13.2% rise over the past year.
Thermo Fisher has an estimated long-term growth rate of 14%. The company’s earnings surpassed estimates in the trailing four quarters, the average surprise being 9.02%. It currently carries a Zacks Rank #2 (Buy).
Thermo Fisher has gained 40.7% compared with the industry’s 7.6% rise over the past year.
AMN Healthcare has an estimated long-term growth rate of 16.2%. The company’s earnings surpassed estimates in the trailing four quarters, the average surprise being 19.51%. It currently sports a Zacks Rank #1.
AMN Healthcare has gained 67.1% against the industry’s 59.6% fall over the past year.