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DexCom (DXCM) Soars 10% This Week: What's Fueling the Gain?
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Shares of DexCom (DXCM - Free Report) have gained almost 10% so far this week compared to its closing last Friday. The strong rally in the company’s share price can be attributed to the recent FDA approval of its first glucose biosensor, Stelo, which will provide glucose insights directly to a user’s smartphone. Moreover, the availability of the sensor over-the-counter to consumers without a prescription is likely to broaden Dexcom’s targeted patient population.
Stelo is likely to be available for purchase online without a prescription starting in the summer of 2024.
DexCom’s strong continuous glucose monitoring (CGM) sensor portfolio, which includes G6 & G7 sensors, already has created a strong market potential. The company’s shares have been riding the success of the CGM portfolio. In the past six months, shares of DXCM are up 24.6% compared with the industry’s 12.2% increase and the S&P 500’s 10.8% gain.
Image Source: Zacks Investment Research
Stelo Potential
Stelo is a small, wearable sensor that can be worn on the back of the upper arm which is indicated for use in adult diabetic patients who are not using insulin therapy. DexCom is gearing up for the launch of Stelo, targeting U.S. patients with non-insulin intensive Type 2 diabetes. However, the FDA has cleared the device for use among non-diabetics as well. This is certainly going to broaden the targeted patient population — primarily insulin users — of its CGM sensors, as DXCM can market the product to people with prediabetes.
Moreover, the availability of Stelo without a prescription is likely to be a key factor that will drive demand for the product as it is expected to increase the total addressable market by several multiple per market analysts.
Meanwhile, the obesity treatment market has been a lucrative spot in the medical industry. Recent hype and rally in GLP-1 drugmakers, following study data on weight loss, reflect the ongoing trend in the obesity market. CGM sensors are prescribed along with weight-loss drugs to better manage obesity, implying growing demand for such sensors as obesity treatment remains in focus. DexCom’s OTC sensor, Stelo, can now be used by patients to track their health while on weight-loss treatment even without an insurance coverage.
Per the CDC, about 38 million people living in the United States are diagnosed with diabetes, and 90-95% of people have Type 2 diabetes. Since insurance frequently does not cover CGM devices for people who are newly diagnosed with Type 2 diabetes or are not using insulin, Stelo offers a chance to offer important information on how well people manage their diabetes.
Stelo is likely to become a key product in DexCom’s portfolio going forward, supported by its robust fundamentals.
Some other top-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , Cardinal Health, Inc. (CAH - Free Report) and Cencora (COR - Free Report) .
DaVita, carrying a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 12.1%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 35.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
DaVita’s shares have risen 67.4% compared with the industry’s 22.4% growth in the past year.
Cardinal Health, carrying a Zacks Rank of 1 at present, has an estimated long-term growth rate of 15.9%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 15.6%.
CAH’s shares have risen 51.6% compared with the industry’s 14% growth in the past year.
Cencora, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 9.8%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 6.7%.
Cencora’s shares have rallied 53.2% in the past year compared with the industry’s 1.1% growth.
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DexCom (DXCM) Soars 10% This Week: What's Fueling the Gain?
Shares of DexCom (DXCM - Free Report) have gained almost 10% so far this week compared to its closing last Friday. The strong rally in the company’s share price can be attributed to the recent FDA approval of its first glucose biosensor, Stelo, which will provide glucose insights directly to a user’s smartphone. Moreover, the availability of the sensor over-the-counter to consumers without a prescription is likely to broaden Dexcom’s targeted patient population.
Stelo is likely to be available for purchase online without a prescription starting in the summer of 2024.
DexCom’s strong continuous glucose monitoring (CGM) sensor portfolio, which includes G6 & G7 sensors, already has created a strong market potential. The company’s shares have been riding the success of the CGM portfolio. In the past six months, shares of DXCM are up 24.6% compared with the industry’s 12.2% increase and the S&P 500’s 10.8% gain.
Image Source: Zacks Investment Research
Stelo Potential
Stelo is a small, wearable sensor that can be worn on the back of the upper arm which is indicated for use in adult diabetic patients who are not using insulin therapy. DexCom is gearing up for the launch of Stelo, targeting U.S. patients with non-insulin intensive Type 2 diabetes. However, the FDA has cleared the device for use among non-diabetics as well. This is certainly going to broaden the targeted patient population — primarily insulin users — of its CGM sensors, as DXCM can market the product to people with prediabetes.
Moreover, the availability of Stelo without a prescription is likely to be a key factor that will drive demand for the product as it is expected to increase the total addressable market by several multiple per market analysts.
Meanwhile, the obesity treatment market has been a lucrative spot in the medical industry. Recent hype and rally in GLP-1 drugmakers, following study data on weight loss, reflect the ongoing trend in the obesity market. CGM sensors are prescribed along with weight-loss drugs to better manage obesity, implying growing demand for such sensors as obesity treatment remains in focus. DexCom’s OTC sensor, Stelo, can now be used by patients to track their health while on weight-loss treatment even without an insurance coverage.
Per the CDC, about 38 million people living in the United States are diagnosed with diabetes, and 90-95% of people have Type 2 diabetes. Since insurance frequently does not cover CGM devices for people who are newly diagnosed with Type 2 diabetes or are not using insulin, Stelo offers a chance to offer important information on how well people manage their diabetes.
Stelo is likely to become a key product in DexCom’s portfolio going forward, supported by its robust fundamentals.
DexCom, Inc. Price
DexCom, Inc. price | DexCom, Inc. Quote
Zacks Rank & Other Stocks to Consider
DexCom currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , Cardinal Health, Inc. (CAH - Free Report) and Cencora (COR - Free Report) .
DaVita, carrying a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 12.1%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 35.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
DaVita’s shares have risen 67.4% compared with the industry’s 22.4% growth in the past year.
Cardinal Health, carrying a Zacks Rank of 1 at present, has an estimated long-term growth rate of 15.9%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 15.6%.
CAH’s shares have risen 51.6% compared with the industry’s 14% growth in the past year.
Cencora, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 9.8%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 6.7%.
Cencora’s shares have rallied 53.2% in the past year compared with the industry’s 1.1% growth.