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DexCom (DXCM) Up 4.6% Since Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for DexCom, Inc. (DXCM - Free Report) . Shares have added about 4.6% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
DexCom (DXCM - Free Report) Incurs Narrower Loss in Q4, Beats on Revenues
DexCom Inc. (DXCM - Free Report) reported loss of $0.09 per share in the fourth quarter of 2016, narrower than the Zacks Consensus Estimate of a loss of $0.10. DexCom had reported earnings of $0.02 in the year-ago quarter.
In the reported quarter, total revenue grew to $171.2 million, reflecting an increase of 31% from $130.8 million in the year-ago quarter. This also came in higher than the Zacks Consensus Estimate of $168.0 million.
Operational Details
In the reported quarter, cost of sales increased to $54.5 from $39.6 million in fourth-quarter 2015. This was primarily due to an increase in sales volume.
Research and development expense increased to $29.0 million in the year-ago quarter to $44.0 million. The decrease in research and development expense was primarily due to the absence of a non-cash charge related to Verily Collaboration Agreement incurred in 2015. This was partially offset by additional payroll costs and additional non-cash share-based compensation.
Selling, general and administrative expense totaled $79 million in the reported quarter compared with $61 million during the same quarter in 2015. The rise was primarily due to year-over-year increases in head count in customer support organizations, higher marketing expenses and IT cost.
In the reported quarter, gross profit totaled $117 million, generating a gross margin of 68% compared with a gross profit of $91 million and a gross margin of 70% for the same quarter in the prior year. On a year-over-year basis, gross margin was negatively impacted by sales of G5 Mobile transmitter.
Financial Condition
As of Dec 31, 2016, DexCom had $123.7 million in cash, cash equivalents and short-term marketable securities versus $115.2 million as of Dec 31, 2015.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been nine revisions lower for the current quarter. In the past month, the consensus estimate has shifted lower by 188.9% due to these changes.
At this time, DexCom's stock has a strong Growth Score of 'A', though it is lagging a lot on the momentum front with an 'F'. Following the exact same course, the stock was allocated also a grade of 'F' on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
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DexCom (DXCM) Up 4.6% Since Earnings Report: Can It Continue?
A month has gone by since the last earnings report for DexCom, Inc. (DXCM - Free Report) . Shares have added about 4.6% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
DexCom (DXCM - Free Report) Incurs Narrower Loss in Q4, Beats on Revenues
DexCom Inc. (DXCM - Free Report) reported loss of $0.09 per share in the fourth quarter of 2016, narrower than the Zacks Consensus Estimate of a loss of $0.10. DexCom had reported earnings of $0.02 in the year-ago quarter.
In the reported quarter, total revenue grew to $171.2 million, reflecting an increase of 31% from $130.8 million in the year-ago quarter. This also came in higher than the Zacks Consensus Estimate of $168.0 million.
Operational Details
In the reported quarter, cost of sales increased to $54.5 from $39.6 million in fourth-quarter 2015. This was primarily due to an increase in sales volume.
Research and development expense increased to $29.0 million in the year-ago quarter to $44.0 million. The decrease in research and development expense was primarily due to the absence of a non-cash charge related to Verily Collaboration Agreement incurred in 2015. This was partially offset by additional payroll costs and additional non-cash share-based compensation.
Selling, general and administrative expense totaled $79 million in the reported quarter compared with $61 million during the same quarter in 2015. The rise was primarily due to year-over-year increases in head count in customer support organizations, higher marketing expenses and IT cost.
In the reported quarter, gross profit totaled $117 million, generating a gross margin of 68% compared with a gross profit of $91 million and a gross margin of 70% for the same quarter in the prior year. On a year-over-year basis, gross margin was negatively impacted by sales of G5 Mobile transmitter.
Financial Condition
As of Dec 31, 2016, DexCom had $123.7 million in cash, cash equivalents and short-term marketable securities versus $115.2 million as of Dec 31, 2015.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been nine revisions lower for the current quarter. In the past month, the consensus estimate has shifted lower by 188.9% due to these changes.
DexCom, Inc. Price and Consensus
DexCom, Inc. Price and Consensus | DexCom, Inc. Quote
VGM Scores
At this time, DexCom's stock has a strong Growth Score of 'A', though it is lagging a lot on the momentum front with an 'F'. Following the exact same course, the stock was allocated also a grade of 'F' on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.