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 first-quarter 2023 performance, along with a series of favorable coverage decisions, is expected to contribute further. However, risks related to stiff competition and reimbursement persist.
This Zacks Rank #3 (Hold) company’s shares have risen 12.9% year to date compared with the industry’s 7.7% growth. The S&P 500 Index has gained 15.3% in the same time frame.
DXCM, a renowned medical-devices company and provider of continuous glucose monitoring (CGM) systems, has a market capitalization of $50.4 billion. It projects 40.4% growth over the next five years and expects to maintain the strong performance going forward.
DexCom’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed the same in one, delivering an average surprise of 15.19%.
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 multiple countries in the second half of 2022, making the latest G7 sensor technology available in international markets. The company received FDA clearance for this technology in December 2022. These developments are likely to support DXCM’s future growth.
In 2022, the company also launched the easy-to-use Dexcom ONE real-time CGM System on prescription for everyone with type 1 or type 2 diabetes using insulin. It did so via drug tariff in NHS England, Wales, Scotland and Northern Ireland.
DexCom’s prospects in alternative markets, such as non-intensive diabetes management, hospitals, gestational, pre-diabetes and obesity are likely to provide it with a competitive edge in the MedTech space.
Positive Coverages: DXCM’s products have been receiving increasing coverage over the past few months, raising our optimism. In June 2022, the company announced that type 1 and type 2 diabetic patients (aged two years and above) who are 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.
DexCom ended the first quarter with new patient additions.
The Ontario government began coverage for the Dexcom G6 CGM System through the province’s Assistive Devices Program. This program has been designed for provincial people with type 1 diabetes, who are above the age of two and meet the coverage criteria.
Strong Q1 Results: DXCM’s solid first-quarter 2023 revenues buoy optimism. Rising volumes across all channels, along with new customer additions due 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 the key catalysts. Additionally, the glucose monitoring market presents significant commercial opportunities for the company.
Downsides
Rising Costs: DexCom's gross margin contracted 90 basis points during the first quarter to 62.4%, reflecting the rising cost of sales. The company expects adjusted gross margin of 62-63% for 2023, indicating persisting cost pressure.
Stiff Competition: The market for blood glucose monitoring devices is highly competitive, subject to rapid changes and new product introductions. DXCM’s competitors manufacture and market products for the single-point finger stick device market and collectively account for the worldwide sales of self-monitored glucose testing systems at present.
Estimate Trend
DexCom is witnessing a stable estimate revision trend for 2023 and 2024. In the past 30 days, the consensus mark for earnings per share remained unchanged at $1.06 for 2023 and at $1.47 for 2024.
The Zacks Consensus Estimate for the company’s second-quarter 2023 revenues is pegged at $837 million, indicating a 20.2% improvement from the year-ago quarter’s reported number. The same for earnings is pinned at 22 cents per share, implying 29.4% growth year over year.
Merit Medical Systems has an estimated long-term growth rate of 11%. The company’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 20.22%.
MMSI’s shares haverisen 17% year to date compared with the industry’s 12.1% growth.
Alcon has an estimated long-term growth rate of 14.9%. Its earnings surpassed estimates in three of the trailing four quarters and met the same once, delivering an average surprise of 8.85%.
ALC’s shares have rallied 16.9% year to date compared with the industry’s 7.7% growth.
Perrigo’s earnings are expected to improve 24.6% in 2023. The strong momentum is likely to continue in 2024 as well. PRGO’s earnings surpassed estimates in two of the trailing four quarters and missed the same twice, delivering an average negative surprise of 0.79%.
The company’s shares have lost 0.4% year to date against the industry’s 5.3% growth.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Shutterstock
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 first-quarter 2023 performance, along with a series of favorable coverage decisions, is expected to contribute further. However, risks related to stiff competition and reimbursement persist.
This Zacks Rank #3 (Hold) company’s shares have risen 12.9% year to date compared with the industry’s 7.7% growth. The S&P 500 Index has gained 15.3% in the same time frame.
DXCM, a renowned medical-devices company and provider of continuous glucose monitoring (CGM) systems, has a market capitalization of $50.4 billion. It projects 40.4% growth over the next five years and expects to maintain the strong performance going forward.
DexCom’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed the same in one, delivering an average surprise of 15.19%.
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 multiple countries in the second half of 2022, making the latest G7 sensor technology available in international markets. The company received FDA clearance for this technology in December 2022. These developments are likely to support DXCM’s future growth.
In 2022, the company also launched the easy-to-use Dexcom ONE real-time CGM System on prescription for everyone with type 1 or type 2 diabetes using insulin. It did so via drug tariff in NHS England, Wales, Scotland and Northern Ireland.
DexCom’s prospects in alternative markets, such as non-intensive diabetes management, hospitals, gestational, pre-diabetes and obesity are likely to provide it with a competitive edge in the MedTech space.
Positive Coverages: DXCM’s products have been receiving increasing coverage over the past few months, raising our optimism. In June 2022, the company announced that type 1 and type 2 diabetic patients (aged two years and above) who are 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.
DexCom ended the first quarter with new patient additions.
The Ontario government began coverage for the Dexcom G6 CGM System through the province’s Assistive Devices Program. This program has been designed for provincial people with type 1 diabetes, who are above the age of two and meet the coverage criteria.
Strong Q1 Results: DXCM’s solid first-quarter 2023 revenues buoy optimism. Rising volumes across all channels, along with new customer additions due 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 the key catalysts. Additionally, the glucose monitoring market presents significant commercial opportunities for the company.
Downsides
Rising Costs: DexCom's gross margin contracted 90 basis points during the first quarter to 62.4%, reflecting the rising cost of sales. The company expects adjusted gross margin of 62-63% for 2023, indicating persisting cost pressure.
Stiff Competition: The market for blood glucose monitoring devices is highly competitive, subject to rapid changes and new product introductions. DXCM’s competitors manufacture and market products for the single-point finger stick device market and collectively account for the worldwide sales of self-monitored glucose testing systems at present.
Estimate Trend
DexCom is witnessing a stable estimate revision trend for 2023 and 2024. In the past 30 days, the consensus mark for earnings per share remained unchanged at $1.06 for 2023 and at $1.47 for 2024.
The Zacks Consensus Estimate for the company’s second-quarter 2023 revenues is pegged at $837 million, indicating a 20.2% improvement from the year-ago quarter’s reported number. The same for earnings is pinned at 22 cents per share, implying 29.4% growth year over year.
DexCom, Inc. Price
DexCom, Inc. price | DexCom, Inc. Quote
Stocks to Consider
Some better-ranked stocks from the broader medical space are Merit Medical Systems (MMSI - Free Report) , Alcon (ALC - Free Report) and Perrigo (PRGO - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Merit Medical Systems has an estimated long-term growth rate of 11%. The company’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 20.22%.
MMSI’s shares haverisen 17% year to date compared with the industry’s 12.1% growth.
Alcon has an estimated long-term growth rate of 14.9%. Its earnings surpassed estimates in three of the trailing four quarters and met the same once, delivering an average surprise of 8.85%.
ALC’s shares have rallied 16.9% year to date compared with the industry’s 7.7% growth.
Perrigo’s earnings are expected to improve 24.6% in 2023. The strong momentum is likely to continue in 2024 as well. PRGO’s earnings surpassed estimates in two of the trailing four quarters and missed the same twice, delivering an average negative surprise of 0.79%.
The company’s shares have lost 0.4% year to date against the industry’s 5.3% growth.