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.
Reasons to Add DexCom (DXCM) Stock to Your Portfolio Now
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 2023 performance, along with a series of favorable coverage decisions, is expected to contribute further. However, risks related to stiff competition persist.
This Zacks Rank #2 (Buy) company’s shares have risen 8.3% year to date compared with the industry’s 1.7% growth. The S&P 500 Index has increased 23.4% in the same time frame.
DXCM, a renowned medical device company and provider of continuous glucose monitoring (CGM) systems, has a market capitalization of $47.37 billion. It projects 33.6% growth over the next five years and expects to maintain the strong performance going forward.
Image Source: Zacks Investment Research
DexCom’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 36.43%.
Let’s delve deeper.
Strong Product Demand: We are upbeat about DexCom's continued strength in its CGM products.
The company continues to expand its product portfolio with the addition of new products like DexCom One and G7 sensor. This has helped accelerate its growth. Sales of these products have reflected strong demand since their launch late last year.
Moreover, the expansion of coverage for CGM systems during the quarter supported growth. This trend is likely to continue for the rest of 2023. The availability of new sensors like G6 and G7 in new international markets is also boosting revenue growth.
Additionally, the glucose monitoring market presents significant commercial opportunities for the company. DexCom’s prospects in alternative markets such as non-intensive diabetes management, hospital, gestational, pre-diabetes and obesity are likely to provide it with a competitive edge in the MedTech space.
New Product Launch: In June, Dexcom announced that it is currently developing a new product with a 15-day sensor, designed specifically for diabetic patients who are not on insulin. The company is planning to launch the new product in the United States in 2024.
Positive Coverages: DXCM’s products have been receiving increasing coverage over the past few months, raising our optimism. The company’s G7 CGM System is already covered by all major pharmacy benefit managers in the United States, following its launch late last year.
In 2022, the company expanded public coverage for 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 leveraging its G6 CGM System via Prince Edward Island’s Diabetes Glucose Sensor Program.
DexCom ended the third 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 Q3 Results: DXCM’s solid third-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. In October, the company raised its guidance for 2025 based on robust demand for its products in the previous two years. Dexcom now expects an additional $3.55 billion in revenues compared with the earlier projected band of $3.5-$3.55 billion.
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 DXCM.
Downsides
Rising Costs: The company’s gross margin contracted 30 basis points during the third quarter to 62.7%, reflecting the rising cost of sales. It expects an adjusted gross margin of approximately 64% 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 an improving estimate revision trend for 2023 and 2024. In the past 60 days, the Zacks Consensus Estimate for earnings has increased from $1.23 per share to $1.44 for 2023 and from $1.59 to $1.70 for 2024.
The consensus mark for the company’s fourth-quarter 2023 revenues is pegged at $1 billion, indicating a 23.3% improvement from the year-ago quarter’s reported number. The same for earnings is pinned at 43 cents per share, implying growth of 26.5% year over year.
Some other top-ranked stocks from the broader medical space are Integer Holdings (ITGR - Free Report) , HealthEquity, Inc. (HQY - Free Report) and Biodesix (BDSX - Free Report) .
ITGR’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 11.98%. The company’s shares have risen 42.5% year to date compared with the industry’s 1.7% growth.
HealthEquity, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 26.8%. HQY’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 16.5%.
The company’s shares have rallied 15% year to date against the industry’s 9.9% decline.
Biodesix, carrying a Zacks Rank #2 at present, has an estimated growth rate of 32.3% for 2024. BDSX’s earnings surpassed estimates in three of the trailing four quarters and missed once, delivering an average surprise of 9.76%.
The stock has fallen 30.9% year to date compared with the industry’s 9.9% decline.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Shutterstock
Reasons to Add DexCom (DXCM) Stock to Your Portfolio 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 2023 performance, along with a series of favorable coverage decisions, is expected to contribute further. However, risks related to stiff competition persist.
This Zacks Rank #2 (Buy) company’s shares have risen 8.3% year to date compared with the industry’s 1.7% growth. The S&P 500 Index has increased 23.4% in the same time frame.
DXCM, a renowned medical device company and provider of continuous glucose monitoring (CGM) systems, has a market capitalization of $47.37 billion. It projects 33.6% growth over the next five years and expects to maintain the strong performance going forward.
Image Source: Zacks Investment Research
DexCom’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 36.43%.
Let’s delve deeper.
Strong Product Demand: We are upbeat about DexCom's continued strength in its CGM products.
The company continues to expand its product portfolio with the addition of new products like DexCom One and G7 sensor. This has helped accelerate its growth. Sales of these products have reflected strong demand since their launch late last year.
Moreover, the expansion of coverage for CGM systems during the quarter supported growth. This trend is likely to continue for the rest of 2023. The availability of new sensors like G6 and G7 in new international markets is also boosting revenue growth.
Additionally, the glucose monitoring market presents significant commercial opportunities for the company. DexCom’s prospects in alternative markets such as non-intensive diabetes management, hospital, gestational, pre-diabetes and obesity are likely to provide it with a competitive edge in the MedTech space.
New Product Launch: In June, Dexcom announced that it is currently developing a new product with a 15-day sensor, designed specifically for diabetic patients who are not on insulin. The company is planning to launch the new product in the United States in 2024.
Positive Coverages: DXCM’s products have been receiving increasing coverage over the past few months, raising our optimism. The company’s G7 CGM System is already covered by all major pharmacy benefit managers in the United States, following its launch late last year.
In 2022, the company expanded public coverage for 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 leveraging its G6 CGM System via Prince Edward Island’s Diabetes Glucose Sensor Program.
DexCom ended the third 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 Q3 Results: DXCM’s solid third-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. In October, the company raised its guidance for 2025 based on robust demand for its products in the previous two years. Dexcom now expects an additional $3.55 billion in revenues compared with the earlier projected band of $3.5-$3.55 billion.
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 DXCM.
Downsides
Rising Costs: The company’s gross margin contracted 30 basis points during the third quarter to 62.7%, reflecting the rising cost of sales. It expects an adjusted gross margin of approximately 64% 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 an improving estimate revision trend for 2023 and 2024. In the past 60 days, the Zacks Consensus Estimate for earnings has increased from $1.23 per share to $1.44 for 2023 and from $1.59 to $1.70 for 2024.
The consensus mark for the company’s fourth-quarter 2023 revenues is pegged at $1 billion, indicating a 23.3% improvement from the year-ago quarter’s reported number. The same for earnings is pinned at 43 cents per share, implying growth of 26.5% year over year.
DexCom, Inc. Price
DexCom, Inc. price | DexCom, Inc. Quote
Other Stocks to Consider
Some other top-ranked stocks from the broader medical space are Integer Holdings (ITGR - Free Report) , HealthEquity, Inc. (HQY - Free Report) and Biodesix (BDSX - Free Report) .
Integer Holdings, carrying a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 33.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
ITGR’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 11.98%. The company’s shares have risen 42.5% year to date compared with the industry’s 1.7% growth.
HealthEquity, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 26.8%. HQY’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 16.5%.
The company’s shares have rallied 15% year to date against the industry’s 9.9% decline.
Biodesix, carrying a Zacks Rank #2 at present, has an estimated growth rate of 32.3% for 2024. BDSX’s earnings surpassed estimates in three of the trailing four quarters and missed once, delivering an average surprise of 9.76%.
The stock has fallen 30.9% year to date compared with the industry’s 9.9% decline.