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Why the Market Dipped But DexCom (DXCM) Gained Today

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DexCom (DXCM - Free Report) closed the latest trading day at $139.94, indicating a +0.73% change from the previous session's end. The stock's performance was ahead of the S&P 500's daily loss of 0.04%. Meanwhile, the Dow lost 0.03%, and the Nasdaq, a tech-heavy index, added 0.03%.

Coming into today, shares of the medical device company had gained 2.72% in the past month. In that same time, the Medical sector lost 0.6%, while the S&P 500 gained 2.57%.

The investment community will be paying close attention to the earnings performance of DexCom in its upcoming release. The company is slated to reveal its earnings on April 25, 2024. On that day, DexCom is projected to report earnings of $0.27 per share, which would represent year-over-year growth of 58.82%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $911.2 million, up 22.89% from the year-ago period.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $1.76 per share and a revenue of $4.32 billion, representing changes of +15.79% and +19.21%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for DexCom. These revisions typically reflect the latest short-term business trends, which can change frequently. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. As of now, DexCom holds a Zacks Rank of #3 (Hold).

Looking at its valuation, DexCom is holding a Forward P/E ratio of 78.94. This indicates a premium in contrast to its industry's Forward P/E of 25.38.

Also, we should mention that DXCM has a PEG ratio of 2.39. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. As of the close of trade yesterday, the Medical - Instruments industry held an average PEG ratio of 2.39.

The Medical - Instruments industry is part of the Medical sector. At present, this industry carries a Zacks Industry Rank of 81, placing it within the top 33% of over 250 industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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