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DexCom Stock Rises Despite Q4 Earnings Miss & Lower Margins
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DexCom, Inc. (DXCM - Free Report) reported fourth-quarter 2024 adjusted earnings per share (EPS) of 45 cents, which missed the Zacks Consensus Estimate of 50 cents by 10%. The company reported earnings of 50 cents per share in the prior-year quarter.
DXCM registered GAAP net income per share of 38 cents, down from the year-ago quarter’s figure of 62 cents.
Total revenues grew 7.6% (8% on an organic basis) to $1.11 billion year over year, almost in linewith the Zacks Consensus Estimate. The year-over-year revenue growth was driven by strong new patient performance and the expanded availability of its G7 and DexCom ONE+ product platforms.
Following the earnings release, shares of DXCM rose almost 1% during after-hours trading on Feb. 13. The stock fell 21.8% year to date against 0.3% growth of the industry. The broader S&P 500 Index has moved up 10% in the same period.
Image Source: Zacks Investment Research
Segmental Details of DXCM
Sensor and other revenues (96% of total revenues) increased 13% on a year-over-year basis to $1.07 billion. Hardware revenues (4%) decreased 49% year over year to $45 million.
Dexcom Revenues by Geography
U.S. revenues (72% of total revenues) increased 4.4% on a year-over-year basis to $802.8 million. International revenues (28%) improved 17.1% (19% on an organic basis) year over year to $310.7 million.
Margin Analysis of DXCM
Adjusted gross profit totaled $661.2 million, down 0.4% from the prior-year quarter’s level. DexCom reported an adjusted gross margin (as a percentage of revenues) of 59.4%, down 480 basis points year over year.
Research and development expenses totaled $139.5 million, up 2.5% year over year. Selling, general, and administrative expenses totaled $327.4 million, up 7.8% year over year.
The company reported total adjusted operating expenses of $209.5 million, down 13.7% from the prior-year period’s recorded number. Adjusted operating margin (as a percentage of revenues) was 18.8%, down 460 basis points year over year.
Financial Position of Dexcom
DXCM exited the fourth quarter with $2.58 billion in cash, cash equivalents, and marketable securities compared with $2.49 billion in the third quarter.
Total assets amounted to $6.48 billion, up sequentially from $6.35 billion.
DXCM’s 2025 Guidance
DexCom issued its outlook for 2025 revenues. This guidance assumes continued strong category growth, steady DME share, new access wins internationally, broader distribution for Stelo and several product advancements across DXCM’s platform.
The company expects revenues to be $4.6 billion, implying 14% year-over-year growth. The sales outlook is in line with the Zacks Consensus Estimate.
DXCM expects adjusted gross margin to be 64-65%. Adjusted operating margin is projected to be approximately 21%.
DexCom’sfourth-quarter sales were in line with estimates but earnings missed the same. However, the company delivered a robust performance in 2024, fueled by multiple strategic initiatives, including an expanded sales force, new product launches and increased global reimbursement coverage. The company broadened its commercial reach, enhancing sales productivity and strengthening its position in the biosensing market. This led to a significant increase in DXCM’s active customer base, reaching more than 2.8 million users worldwide — up 25% from the 2023 level.
A major highlight of 2024 was the company’s ability to grow its active customer and prescriber base. It added more than 50,000 new U.S. prescribers, particularly in primary care and emerging care points such as Maternal-Fetal Medicine. This broadened access to DXCM’s CGM technology, helping drive record new patient starts in the fourth quarter. Enhanced physician engagement and increasing prescribing depth contributed to strong patient acquisition trends.
Stelo has been a notable contributor to growth, particularly in the non-insulin and health-conscious consumer segments. Since its launch, more than 140,000 people have used Stelo, with strong adoption seen among type 2 diabetes and prediabetes populations. DexCom is enhancing Stelo through AI-driven personalization, integration with devices like the Oura Ring and expanded distribution via Amazon, setting the stage for continued market penetration.
DexCom’s international revenues are driven by expansion in markets such as France and New Zealand, where broader reimbursement coverage was achieved. France, in particular, remains a key growth market, with DexCom ONE+ gaining traction. The company is also focusing on increasing basal insulin coverage across other markets, with early wins in Germany, Canada and Australia, and a growing presence in Japan.
DexCom’s strong revenue growth projection for 2025, driven by continued market expansion, broader access wins and advancements in its CGM technology, looks promising. Key plans include the rollout of a 15-day wear G7 system, improved manufacturing efficiencies and further penetration into the non-insulin diabetes market. With an increasingly productive sales force and a growing global presence, DexCom is well-positioned to sustain its upward trajectory.
Reimbursement expansion is also playing a crucial role in DexCom’s growth, with insurance coverage extending beyond insulin users. As of January 2025, two of the three largest PBMs in the United States covered DexCom CGMs for all diabetes patients, granting access to over 5 million people with type 2 diabetes, not on insulin. This marks a substantial step forward from the previous basal insulin reimbursement milestone. DexCom is actively working to expand coverage for the remaining 20 million individuals in this category, further strengthening its market position.
Zacks Rank and Stocks to Consider
DXCM carries a Zacks Rank #3 (Hold) at present. Some better-ranked stocks in the broader medical space are Penumbra (PEN - Free Report) , Masimo (MASI - Free Report) and Avenna Healthcare (AVAH - Free Report) .
PEN’s earnings beat estimates in three of the trailing four quarters and missed in one, delivering an average surprise of 10.54%. The company is scheduled to release fourth-quarter results on Feb. 18.
PEN’s shares have gained 44.1% compared with the industry’s 0.3% growth in the past six months.
Masimo, carrying a Zacks Rank #2 at present, has an estimated growth rate of 11.1% for 2025.
MASI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 17.10%. Its shares have risen 47.8% compared with the industry’s 0.3% growth in the past six months. The company is scheduled to release fourth-quarter results on Feb. 25.
Avenna Healthcare, carrying a Zacks Rank of 2 at present, has an estimated earnings growth rate of 666.7% for 2025. It delivered a trailing four-quarter average earnings surprise of 135.00%. The company is expected to release fourth-quarter results in March.
AVAH’s shares have lost 4% in the past six months against the industry’s 2.1% growth.
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DexCom Stock Rises Despite Q4 Earnings Miss & Lower Margins
DexCom, Inc. (DXCM - Free Report) reported fourth-quarter 2024 adjusted earnings per share (EPS) of 45 cents, which missed the Zacks Consensus Estimate of 50 cents by 10%. The company reported earnings of 50 cents per share in the prior-year quarter.
DXCM registered GAAP net income per share of 38 cents, down from the year-ago quarter’s figure of 62 cents.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Revenue Details of Dexcom
Total revenues grew 7.6% (8% on an organic basis) to $1.11 billion year over year, almost in linewith the Zacks Consensus Estimate. The year-over-year revenue growth was driven by strong new patient performance and the expanded availability of its G7 and DexCom ONE+ product platforms.
Following the earnings release, shares of DXCM rose almost 1% during after-hours trading on Feb. 13. The stock fell 21.8% year to date against 0.3% growth of the industry. The broader S&P 500 Index has moved up 10% in the same period.
Image Source: Zacks Investment Research
Segmental Details of DXCM
Sensor and other revenues (96% of total revenues) increased 13% on a year-over-year basis to $1.07 billion. Hardware revenues (4%) decreased 49% year over year to $45 million.
Dexcom Revenues by Geography
U.S. revenues (72% of total revenues) increased 4.4% on a year-over-year basis to $802.8 million. International revenues (28%) improved 17.1% (19% on an organic basis) year over year to $310.7 million.
Margin Analysis of DXCM
Adjusted gross profit totaled $661.2 million, down 0.4% from the prior-year quarter’s level. DexCom reported an adjusted gross margin (as a percentage of revenues) of 59.4%, down 480 basis points year over year.
Research and development expenses totaled $139.5 million, up 2.5% year over year. Selling, general, and administrative expenses totaled $327.4 million, up 7.8% year over year.
The company reported total adjusted operating expenses of $209.5 million, down 13.7% from the prior-year period’s recorded number. Adjusted operating margin (as a percentage of revenues) was 18.8%, down 460 basis points year over year.
Financial Position of Dexcom
DXCM exited the fourth quarter with $2.58 billion in cash, cash equivalents, and marketable securities compared with $2.49 billion in the third quarter.
Total assets amounted to $6.48 billion, up sequentially from $6.35 billion.
DXCM’s 2025 Guidance
DexCom issued its outlook for 2025 revenues. This guidance assumes continued strong category growth, steady DME share, new access wins internationally, broader distribution for Stelo and several product advancements across DXCM’s platform.
The company expects revenues to be $4.6 billion, implying 14% year-over-year growth. The sales outlook is in line with the Zacks Consensus Estimate.
DXCM expects adjusted gross margin to be 64-65%. Adjusted operating margin is projected to be approximately 21%.
DexCom, Inc. Price, Consensus and EPS Surprise
DexCom, Inc. price-consensus-eps-surprise-chart | DexCom, Inc. Quote
Wrapping Up
DexCom’sfourth-quarter sales were in line with estimates but earnings missed the same. However, the company delivered a robust performance in 2024, fueled by multiple strategic initiatives, including an expanded sales force, new product launches and increased global reimbursement coverage. The company broadened its commercial reach, enhancing sales productivity and strengthening its position in the biosensing market. This led to a significant increase in DXCM’s active customer base, reaching more than 2.8 million users worldwide — up 25% from the 2023 level.
A major highlight of 2024 was the company’s ability to grow its active customer and prescriber base. It added more than 50,000 new U.S. prescribers, particularly in primary care and emerging care points such as Maternal-Fetal Medicine. This broadened access to DXCM’s CGM technology, helping drive record new patient starts in the fourth quarter. Enhanced physician engagement and increasing prescribing depth contributed to strong patient acquisition trends.
Stelo has been a notable contributor to growth, particularly in the non-insulin and health-conscious consumer segments. Since its launch, more than 140,000 people have used Stelo, with strong adoption seen among type 2 diabetes and prediabetes populations. DexCom is enhancing Stelo through AI-driven personalization, integration with devices like the Oura Ring and expanded distribution via Amazon, setting the stage for continued market penetration.
DexCom’s international revenues are driven by expansion in markets such as France and New Zealand, where broader reimbursement coverage was achieved. France, in particular, remains a key growth market, with DexCom ONE+ gaining traction. The company is also focusing on increasing basal insulin coverage across other markets, with early wins in Germany, Canada and Australia, and a growing presence in Japan.
DexCom’s strong revenue growth projection for 2025, driven by continued market expansion, broader access wins and advancements in its CGM technology, looks promising. Key plans include the rollout of a 15-day wear G7 system, improved manufacturing efficiencies and further penetration into the non-insulin diabetes market. With an increasingly productive sales force and a growing global presence, DexCom is well-positioned to sustain its upward trajectory.
Reimbursement expansion is also playing a crucial role in DexCom’s growth, with insurance coverage extending beyond insulin users. As of January 2025, two of the three largest PBMs in the United States covered DexCom CGMs for all diabetes patients, granting access to over 5 million people with type 2 diabetes, not on insulin. This marks a substantial step forward from the previous basal insulin reimbursement milestone. DexCom is actively working to expand coverage for the remaining 20 million individuals in this category, further strengthening its market position.
Zacks Rank and Stocks to Consider
DXCM carries a Zacks Rank #3 (Hold) at present. Some better-ranked stocks in the broader medical space are Penumbra (PEN - Free Report) , Masimo (MASI - Free Report) and Avenna Healthcare (AVAH - Free Report) .
Penumbra, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 37.5% for 2025. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
PEN’s earnings beat estimates in three of the trailing four quarters and missed in one, delivering an average surprise of 10.54%. The company is scheduled to release fourth-quarter results on Feb. 18.
PEN’s shares have gained 44.1% compared with the industry’s 0.3% growth in the past six months.
Masimo, carrying a Zacks Rank #2 at present, has an estimated growth rate of 11.1% for 2025.
MASI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 17.10%. Its shares have risen 47.8% compared with the industry’s 0.3% growth in the past six months. The company is scheduled to release fourth-quarter results on Feb. 25.
Avenna Healthcare, carrying a Zacks Rank of 2 at present, has an estimated earnings growth rate of 666.7% for 2025. It delivered a trailing four-quarter average earnings surprise of 135.00%. The company is expected to release fourth-quarter results in March.
AVAH’s shares have lost 4% in the past six months against the industry’s 2.1% growth.