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Will CGM Sensor Demand Continue to Drive DexCom Q3 Earnings?
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DexCom, Inc. (DXCM - Free Report) is scheduled to release third-quarter 2024 results on Oct. 24, after the closing bell. In the last reported quarter, the company’s earnings beat estimates by 10.26%.
The bottom line also outpaced the consensus mark in each of the trailing four quarters, delivering an average surprise of 23.03%.
Currently, the Zacks Consensus Estimate for revenues is pegged at $991.6 million, indicating growth of 1.7% from the year-ago quarter’s reported figure. The consensus mark for earnings is pinned at 43 cents per share, implying a 14% decline year over year.
Factors to Note
DexCom’s revenues in the to-be-reported quarter are likely to have been aided by the continued increase in product volume. This surge can be attributed to new patient additions across all channels and rising global awareness about the benefits of DXCM’s real-time Continuous Glucose Monitoring (“CGM”) system.
Potential robust contributions from the Sensor segment, and domestic and international revenue growth are likely to have been the key catalysts behind the company’s third-quarter performance.
In the second quarter, International revenues (27% of total revenues) surged 7% year over year to $272.4 million. Organically, the segment’s revenues were up 10% in the last reported quarter. U.S. revenues (73% of total revenues) increased 19% in the same period. The trend is likely to have continued in the third quarter, owing to broad-based growth.
DXCM’s continued focus on introducing new sensors like G6 and G7 in international markets and expanding coverage for its sensors is supporting sales growth. The company expanded the coverage for G7 in August to include Québec residents living with type 1 diabetes. Moreover, the company launched Stelo in August. This should bring additional revenues during the quarter. We expect DXCM to provide updates on Stelo’s launch uptake during the third-quarter earnings call. Stello is the first over-the-counter device from the company’s portfolio for type 2 diabetes patients.
DexCom has been benefiting from demographic trends and lifestyles in countries outside Europe and the United States. Per management, international growth remains strong and presents lucrative opportunities, courtesy of improving global access and awareness.
The Zacks Consensus Estimate for U.S. and International revenues is pegged at $719 million and $265.2 million, respectively, for the third quarter.
DXCM reported a flat gross margin and improving operating margin during the second quarter. The trend is likely to have followed in the third quarter. However, the launch of Stelo might have led to a rise in operating expenses during the quarter.
What Our Quantitative Model Suggests
Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: DexCom has an Earnings ESP of +1.25%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).
Stocks Worth a Look
Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this reporting cycle.
The company is likely to release third-quarter 2024 results on Nov. 5. Its earnings surpassed estimates in each of the trailing four quarters, the average surprise being 14.63%. The Zacks Consensus Estimate for EPS is expected to improve 33.3% from the year-ago reported figure.
ACADIA Pharmaceuticals (ACAD - Free Report) has an Earnings ESP of +38.39% and a Zacks Rank #3 at present. The company is expected to release third-quarter 2024 results on Nov. 6.
ACAD’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 42.37%. The Zacks Consensus Estimate for EPS is expected to surge 127.5% from the year-ago quarter’s figure.
Becton, Dickinson and Company (BDX - Free Report) has an Earnings ESP of +0.91% and a Zacks Rank #2 at present. The company is expected to release third-quarter 2024 results on Nov. 7.
BDX’s earnings surpassed estimates in three of the trailing four quarters and met once, the average surprise being 6.24%. The Zacks Consensus Estimate for EPS is expected to increase 10.2% from the year-earlier quarter’s reported figure.
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Will CGM Sensor Demand Continue to Drive DexCom Q3 Earnings?
DexCom, Inc. (DXCM - Free Report) is scheduled to release third-quarter 2024 results on Oct. 24, after the closing bell. In the last reported quarter, the company’s earnings beat estimates by 10.26%.
The bottom line also outpaced the consensus mark in each of the trailing four quarters, delivering an average surprise of 23.03%.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Q3 Estimates
Currently, the Zacks Consensus Estimate for revenues is pegged at $991.6 million, indicating growth of 1.7% from the year-ago quarter’s reported figure. The consensus mark for earnings is pinned at 43 cents per share, implying a 14% decline year over year.
Factors to Note
DexCom’s revenues in the to-be-reported quarter are likely to have been aided by the continued increase in product volume. This surge can be attributed to new patient additions across all channels and rising global awareness about the benefits of DXCM’s real-time Continuous Glucose Monitoring (“CGM”) system.
Potential robust contributions from the Sensor segment, and domestic and international revenue growth are likely to have been the key catalysts behind the company’s third-quarter performance.
In the second quarter, International revenues (27% of total revenues) surged 7% year over year to $272.4 million. Organically, the segment’s revenues were up 10% in the last reported quarter. U.S. revenues (73% of total revenues) increased 19% in the same period. The trend is likely to have continued in the third quarter, owing to broad-based growth.
DexCom, Inc. Price and EPS Surprise
DexCom, Inc. price-eps-surprise | DexCom, Inc. Quote
DXCM’s continued focus on introducing new sensors like G6 and G7 in international markets and expanding coverage for its sensors is supporting sales growth. The company expanded the coverage for G7 in August to include Québec residents living with type 1 diabetes. Moreover, the company launched Stelo in August. This should bring additional revenues during the quarter. We expect DXCM to provide updates on Stelo’s launch uptake during the third-quarter earnings call. Stello is the first over-the-counter device from the company’s portfolio for type 2 diabetes patients.
DexCom has been benefiting from demographic trends and lifestyles in countries outside Europe and the United States. Per management, international growth remains strong and presents lucrative opportunities, courtesy of improving global access and awareness.
The Zacks Consensus Estimate for U.S. and International revenues is pegged at $719 million and $265.2 million, respectively, for the third quarter.
DXCM reported a flat gross margin and improving operating margin during the second quarter. The trend is likely to have followed in the third quarter. However, the launch of Stelo might have led to a rise in operating expenses during the quarter.
What Our Quantitative Model Suggests
Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: DexCom has an Earnings ESP of +1.25%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).
Stocks Worth a Look
Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this reporting cycle.
Masimo (MASI - Free Report) has an Earnings ESP of +0.40% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is likely to release third-quarter 2024 results on Nov. 5. Its earnings surpassed estimates in each of the trailing four quarters, the average surprise being 14.63%. The Zacks Consensus Estimate for EPS is expected to improve 33.3% from the year-ago reported figure.
ACADIA Pharmaceuticals (ACAD - Free Report) has an Earnings ESP of +38.39% and a Zacks Rank #3 at present. The company is expected to release third-quarter 2024 results on Nov. 6.
ACAD’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 42.37%. The Zacks Consensus Estimate for EPS is expected to surge 127.5% from the year-ago quarter’s figure.
Becton, Dickinson and Company (BDX - Free Report) has an Earnings ESP of +0.91% and a Zacks Rank #2 at present. The company is expected to release third-quarter 2024 results on Nov. 7.
BDX’s earnings surpassed estimates in three of the trailing four quarters and met once, the average surprise being 6.24%. The Zacks Consensus Estimate for EPS is expected to increase 10.2% from the year-earlier quarter’s reported figure.