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DXCM Q4 Earnings to Reflect Market Expansion & Stelo Impact?
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DexCom, Inc. (DXCM - Free Report) is scheduled to release fourth-quarter 2024 results on Feb. 13, after the closing bell. In the last reported quarter, the company’s earnings beat estimates by 4.65%.
The bottom line also outpaced the consensus mark in each of the trailing four quarters, delivering an average surprise of 12.43%.
Shares of DXCM have gained 23.4% in the past six months compared with the industry’s 4.7% growth. The S&P 500 Index has rallied 13.5% in the same time frame.
Image Source: Zacks Investment Research
Q4 Estimates
Currently, the Zacks Consensus Estimate for revenues is pegged at $1.1 billion, indicating growth of 6.5% from the year-ago quarter’s reported figure. The consensus mark for earnings is pinned at 50 cents per share, which remained flat year over year.
Last month, DXCM posted preliminary results for the fourth quarter. U.S. revenues reached approximately $803 million, representing a 4% rise year over year, while international revenues climbed 17% to around $310 million.
Factors to Note
DexCom’s fourth-quarter 2024 outlook remains promising, with multiple tailwinds supporting potential growth. The expansion of the U.S. prescriber base, stabilization of the DME channel, strong international performance and the growing traction of Stelo are key factors driving optimism. Additionally, regulatory progress with the 15-day G7 CGM could provide a long-term boost. While challenges such as competitive pressures and channel mix shifts remain, DexCom appears well-positioned to accelerate growth and improve financial performance as it heads into 2025.
U.S. Market Dynamics and Sales Force Expansion
DXCM’s quarterly performance is likely to have been shaped by its ongoing sales force expansion and efforts to stabilize its presence in the Durable Medical Equipment (“DME”) channel. In the third quarter, the company reported a record number of new patient starts, which signals improving commercial execution. The addition of 35,000 new clinicians since April is another strong indicator of potential growth. The increased base is expected to have contributed significantly in the soon-to-be-reported quarter.
Furthermore, DXCM has implemented a more balanced channel strategy, ensuring DME providers receive a fair share of prescriptions, which could have supported revenue stabilization in the fourth quarter. While U.S. revenues declined 2% year over year in the third quarter, sequential improvement is anticipated as new patient starts convert into sustained sales.
International Market Expansion and Reimbursement Wins
DexCom’s international segment showed resilience, growing 12% year over year in the last reported quarter, driven by the expanded availability of G7 and Dexcom ONE+. It launched G7 in Australia and Dexcom ONE+ in France during the third quarter, which provided access to over 600,000 people with diabetes. The return to growth in Japan, where the new sales structure gained traction, was another key highlight.
Given the momentum in these regions, the fourth quarter is likely to have witnessed strong international revenue growth. The company’s ability to expand reimbursement coverage, particularly for Type 2 basal insulin users, remains a critical driver that may further boost sales in the coming quarters.
Stelo: A Game-Changer for the Non-Insulin Market
One of DexCom’s most promising growth drivers for the fourth quarter is likely to have been Stelo, the over-the-counter continuous glucose monitor (CGM) targeted at people with prediabetes and Type 2 diabetes who are not on insulin. Since its launch in the third quarter, the product has generated significant inbound interest, and nearly 50% of customers have opted for the subscription model.
Early customer feedback highlights positive experiences with ordering, delivery and app functionality, suggesting strong adoption potential. DexCom has also begun expanding Stelo’s distribution channels, including direct sales to clinicians and partnerships with DME providers, which should have accelerated its uptake in the fourth quarter. Additionally, the holiday season could have provided an added boost as CGM awareness grew among consumers interested in metabolic health.
Financial Outlook and Margin Expansion
On its third-quarter earnings call, DexCom reaffirmed its full-year 2024 revenue guidance of $4.00-$4.05 billion, representing organic growth of 11-13%. The company expects margin improvement in the fourth quarter as the impact of rebate headwinds moderates and operational efficiencies from the G7 transition materialize. Gross margin is projected to remain around 63%, with adjusted EBITDA of approximately 29%. Additionally, the company’s strong cash position of $2.5 billion provides financial flexibility to support strategic initiatives, including share repurchases and product development.
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 -11.50%. 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 #3 at present.
Stocks Worth a Look
Here are a few medical stocks worth considering, as these have the right combination of elements to come up with an earnings beat this reporting cycle.
NTRA’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 36.37%. The Zacks Consensus Estimate for fourth-quarter EPS implies a rise of 34.4% from the year-ago reported figure.
Masimo (MASI - Free Report) has an Earnings ESP of +4.05% and a Zacks Rank #2 at present.
The company is scheduled to release fourth-quarter 2024 results on Feb. 25. Its earnings surpassed estimates in each of the trailing four quarters, the average surprise being 17.10%. The Zacks Consensus Estimate for EPS implies an improvement of 14.4% from the year-ago reported figure.
Maravai LifeSciences (MRVI - Free Report) has an Earnings ESP of +10.00% and a Zacks Rank #3 at present. The company is expected to release fourth-quarter 2024 results in February.
MRVI delivered a trailing four-quarter average earnings surprise of 116.67%. The Zacks Consensus Estimate for fourth-quarter EPS implies a decline of 400% from the year-ago reported figure.
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DXCM Q4 Earnings to Reflect Market Expansion & Stelo Impact?
DexCom, Inc. (DXCM - Free Report) is scheduled to release fourth-quarter 2024 results on Feb. 13, after the closing bell. In the last reported quarter, the company’s earnings beat estimates by 4.65%.
The bottom line also outpaced the consensus mark in each of the trailing four quarters, delivering an average surprise of 12.43%.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Shares of DXCM have gained 23.4% in the past six months compared with the industry’s 4.7% growth. The S&P 500 Index has rallied 13.5% in the same time frame.
Image Source: Zacks Investment Research
Q4 Estimates
Currently, the Zacks Consensus Estimate for revenues is pegged at $1.1 billion, indicating growth of 6.5% from the year-ago quarter’s reported figure. The consensus mark for earnings is pinned at 50 cents per share, which remained flat year over year.
Last month, DXCM posted preliminary results for the fourth quarter. U.S. revenues reached approximately $803 million, representing a 4% rise year over year, while international revenues climbed 17% to around $310 million.
Factors to Note
DexCom’s fourth-quarter 2024 outlook remains promising, with multiple tailwinds supporting potential growth. The expansion of the U.S. prescriber base, stabilization of the DME channel, strong international performance and the growing traction of Stelo are key factors driving optimism. Additionally, regulatory progress with the 15-day G7 CGM could provide a long-term boost. While challenges such as competitive pressures and channel mix shifts remain, DexCom appears well-positioned to accelerate growth and improve financial performance as it heads into 2025.
U.S. Market Dynamics and Sales Force Expansion
DXCM’s quarterly performance is likely to have been shaped by its ongoing sales force expansion and efforts to stabilize its presence in the Durable Medical Equipment (“DME”) channel. In the third quarter, the company reported a record number of new patient starts, which signals improving commercial execution. The addition of 35,000 new clinicians since April is another strong indicator of potential growth. The increased base is expected to have contributed significantly in the soon-to-be-reported quarter.
Furthermore, DXCM has implemented a more balanced channel strategy, ensuring DME providers receive a fair share of prescriptions, which could have supported revenue stabilization in the fourth quarter. While U.S. revenues declined 2% year over year in the third quarter, sequential improvement is anticipated as new patient starts convert into sustained sales.
International Market Expansion and Reimbursement Wins
DexCom’s international segment showed resilience, growing 12% year over year in the last reported quarter, driven by the expanded availability of G7 and Dexcom ONE+. It launched G7 in Australia and Dexcom ONE+ in France during the third quarter, which provided access to over 600,000 people with diabetes. The return to growth in Japan, where the new sales structure gained traction, was another key highlight.
Given the momentum in these regions, the fourth quarter is likely to have witnessed strong international revenue growth. The company’s ability to expand reimbursement coverage, particularly for Type 2 basal insulin users, remains a critical driver that may further boost sales in the coming quarters.
Stelo: A Game-Changer for the Non-Insulin Market
One of DexCom’s most promising growth drivers for the fourth quarter is likely to have been Stelo, the over-the-counter continuous glucose monitor (CGM) targeted at people with prediabetes and Type 2 diabetes who are not on insulin. Since its launch in the third quarter, the product has generated significant inbound interest, and nearly 50% of customers have opted for the subscription model.
Early customer feedback highlights positive experiences with ordering, delivery and app functionality, suggesting strong adoption potential. DexCom has also begun expanding Stelo’s distribution channels, including direct sales to clinicians and partnerships with DME providers, which should have accelerated its uptake in the fourth quarter. Additionally, the holiday season could have provided an added boost as CGM awareness grew among consumers interested in metabolic health.
Financial Outlook and Margin Expansion
On its third-quarter earnings call, DexCom reaffirmed its full-year 2024 revenue guidance of $4.00-$4.05 billion, representing organic growth of 11-13%. The company expects margin improvement in the fourth quarter as the impact of rebate headwinds moderates and operational efficiencies from the G7 transition materialize. Gross margin is projected to remain around 63%, with adjusted EBITDA of approximately 29%. Additionally, the company’s strong cash position of $2.5 billion provides financial flexibility to support strategic initiatives, including share repurchases and product development.
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 -11.50%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
DexCom, Inc. Price and EPS Surprise
DexCom, Inc. price-eps-surprise | DexCom, Inc. Quote
Zacks Rank: The company currently carries a Zacks Rank #3 at present.
Stocks Worth a Look
Here are a few medical stocks worth considering, as these have the right combination of elements to come up with an earnings beat this reporting cycle.
Natera (NTRA - Free Report) has an Earnings ESP of +61.91% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
NTRA’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 36.37%. The Zacks Consensus Estimate for fourth-quarter EPS implies a rise of 34.4% from the year-ago reported figure.
Masimo (MASI - Free Report) has an Earnings ESP of +4.05% and a Zacks Rank #2 at present.
The company is scheduled to release fourth-quarter 2024 results on Feb. 25. Its earnings surpassed estimates in each of the trailing four quarters, the average surprise being 17.10%. The Zacks Consensus Estimate for EPS implies an improvement of 14.4% from the year-ago reported figure.
Maravai LifeSciences (MRVI - Free Report) has an Earnings ESP of +10.00% and a Zacks Rank #3 at present. The company is expected to release fourth-quarter 2024 results in February.
MRVI delivered a trailing four-quarter average earnings surprise of 116.67%. The Zacks Consensus Estimate for fourth-quarter EPS implies a decline of 400% from the year-ago reported figure.