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DexCom (DXCM) to Report Q4 Earnings: What's in the Cards?

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DexCom, Inc. (DXCM - Free Report) fourth-quarter 2018 results are scheduled for release on Feb 21, after market close. The large and growing diabetes market, solid sensor volumes and international-revenue growth are expected to provide a boost to the quarterly results.

Q3 Results at a Glance

DexCom reported adjusted earnings of 17 cents per share in the third quarter of 2018, outpacing the Zacks Consensus Estimate of a loss of 12 cents. Also, the figure improved from a loss of 4 cents registered in the year-ago quarter. Total revenues rallied 44.5% to $266.7 million on a year-over-year basis. The top-line figure surpassed the Zacks Consensus Estimate of $242 million.

Furthermore, the company has an average four-quarter positive earnings surprise of 37.6%.

Which Way are Estimates Trending?

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 14 cents, reflecting 40% growth year over year. The same for revenues is pinned at $330.6 million, mirroring 49.6% improvement year over year.

Let’s delve deeper.

Sensor Segment to Boost Q4 Results

DexCom's unique sensor technology has provided it a competitive edge in the MedTech space. In the third quarter, revenues at the Sensor segment (73% of total revenues) surged 47% on a year-over-year basis to $194 million.

The company is expected to gain from strong demand for the G6 sensors. In fact, these sensors are likely to rake in huge profits in the quarter to be reported. By the end of the third quarter of 2018, management at DexCom announced that the G6 system is available in 14 countries and the company will continue to roll it globally in 2019. Meanwhile, DexCom’s Insulet and Lilly diabetes management products continue to progress well.

The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $209 million, reflecting 29.8% growth year over year.

Other Factors at Play

Preliminary Results

DexCom expects preliminary, unaudited revenues for the fourth quarter to exceed $331 million, mirroring 50% growth year over year. For 2018, total preliminary, unaudited revenues are expected to outpace $1.03 billion, up 42% year over year.

In the meantime, management remains optimistic about DexCom’s strong growth in G6 CGM platform both in the United States and internationally.

Transmitter Revenues & Receiver Revenues

Transmitter revenues (18% of total revenues) increased 27% year over year to $48.5 million in the third quarter. The Zacks Consensus Estimate for the segment is pegged at $45.9 million for the fourth quarter, up 8.3% year over year.

In the third quarter, Receiver revenues (9% of total revenues) rallied 68% year over year to $24.2 million. The Zacks Consensus Estimate for the segment stands at $45.9 million for the fourth quarter, up 49.3% year over year.

What Does Our Model Say?

Our proven model clearly indicates that a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to deliver a positive earnings surprise. This is not the case here.

Earnings ESP: DexCom has an Earnings ESP of -14.3%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: DexCom carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Please note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

DexCom, Inc. Price and EPS Surprise


Stocks Worth a Look

Masimo Corporation (MASI - Free Report) has an Earnings ESP of +1.04% and a Zacks Rank #3.

AxoGen, Inc. (AXGN - Free Report) has an Earnings ESP of +14.29% and a Zacks Rank #3.

Wright Medical Group N.V. (WMGI - Free Report) has an Earnings ESP of +58.24% and a Zacks Rank #2.

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