Back to top

Image: Bigstock

Here's Why You Should Add DexCom (DXCM) to Your Portfolio

Read MoreHide Full Article

DexCom, Inc. DXCM is likely to gain from a strong product portfolio and solid view for 2019.

Shares of this company have rallied 53.5% compared with the industry’s 14.9% rise in a year’s time. The current level also compares favorably with the S&P 500 index’s 25.6% growth over the same time frame.

This $21.12-billion medical device company currently has a Zacks Rank #2 (Buy). DexCom’s earnings are expected to have grown 31.5% in the fourth quarter. Also, the company has a trailing four-quarter positive earnings surprise of 189.7%, on average.

The stock also has a Growth Score of A. Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, are better picks than most.

Let’s take a closer look at the factors working in favor of the company right now.

Product Portfolio & Guidance

DexCom’s solid product portfolio has been significantly boosting the company’s top line.

Notably, the company is well poised to achieve its long-term target on the back of expanded G6 rollout and increased access to CGM. Additionally, the company is ramping up the transition to G6 in additional O-US markets. DexCom is also making progress toward finalizing the G7 CGM system and projects a late 2020 or early 2021 launch.

For investors’ notice, the company’s coveted G6 CGM (Continuous Glucose Monitoring) system received FDA clearance and CE Mark in 2019.

DexCom, Inc. Price and Consensus


DexCom, Inc. Price and Consensus

DexCom, Inc. price-consensus-chart | DexCom, Inc. Quote

That’s not all. Dexcom’s Insulet and Lilly diabetes management products also continue to progress well.

Reflective of these, the company raised its 2019 view in recent times.

DexCom expects revenues in the range of $1.43-$1.45 billion (up from the previously guided range of $1.33-$1.38 billion). While adjusted operating margin is projected to be about 9% of net revenues (the previous projection 7%), adjusted EBITDA margin is anticipated to be 19.5% (the prior estimate 18.5%).

Which Way Are Estimates Headed?

For 2019, the Zacks Consensus Estimate for revenues is pegged at $1.45 billion. For adjusted earnings per share, the same stands at $1.42 per share, suggesting a massive upside of 373.3% from the year-ago reported figure.

Other Stocks to Consider

Other top-ranked stocks in the broader medical space are Cerner Corporation CERN, HealthEquity HQY and Veeva Systems (VEEV - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cerner’s long-term earnings growth rate is estimated at 13.6%.

HealthEquity’s long-term earnings growth rate is pegged at 25%.

Veeva’s long-term earnings growth rate is estimated at 21.9%.

Just Released: Zacks’ 7 Best Stocks for Today

Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.6% per year.

These 7 were selected because of their superior potential for immediate breakout.

See these time-sensitive tickers now >>

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Veeva Systems Inc. (VEEV) - free report >>