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

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DexCom, Inc. (DXCM - Free Report) is scheduled to release fourth-quarter 2019 results on Feb 13, after the closing bell. In the last reported quarter, the company delivered a positive earnings surprise of 261.1%. Further, it has an average four-quarter positive surprise of 189.7%.

Q4 Estimates

Currently, the Zacks Consensus Estimate for fourth-quarter revenues is pegged at $457 million, suggesting growth of 35.2% from the year-ago reported number. The consensus estimate for earnings is pegged at 75 cents per share, indicating an improvement of 38.9% from the year-ago reported figure.

Key Catalysts

DexCom’s fourth-quarter top line is likely to reflect possible increase in volumes, on the back of new patients across all channels, and rising global awareness regarding the benefits of the company’s real-time Continuous Glucose Monitoring (CGM).

Moreover, the company raised 2019 revenue outlook and now anticipates total revenues in the range of $1.43-$1.45 billion (up from the previously guided range of $1.33-$1.38 billion).

Notably, DexCom’s FDA-cleared CGM system — the DexCom G4 Platinum — has been driving the company’s top line.

DexCom, Inc. Price and EPS Surprise

 

DexCom, Inc. Price and EPS Surprise

DexCom, Inc. price-eps-surprise | DexCom, Inc. Quote

Per management, in September 2019, the company started selling G6 in Canada and received a remarkable response to this launch. In early October, DexCom officially began shipping G6 to its Medicare patients. Moreover, the company has partnered with Walgreens to ensure that all Medicare patients can fill their prescriptions for DexCom CGM through any of Walgreens nationwide retail locations.

Consequently, these developments are anticipated to have positively impacted the company’s overall performance in the to-be-reported quarter.

DexCom has significant opportunity to capitalize on international markets driven by the demographic trends and lifestyle in countries outside the United States and Europe. Per management, international growth remains strong and presents great opportunity in the future on the back of improving global access and awareness. This is likely to have resulted in higher international revenues in the fourth quarter.

Given the improved operational discipline, the company is likely to have experienced better operating margins in the fourth quarter. Adjusted operating margin is projected to be about 9% of net revenues (up from the previous projection of 7%) in 2019.

However, increase in operating expenses and intense competition is likely to have affected the company’s overall performance in the fourth quarter.

What Our Quantitative Model Suggests

Per our proven model, a 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. This is the case here as you will see.

Earnings ESP: DexCom has an Earnings ESP of +12.27%. 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.

Stocks Worth a Look

Here are a few other medical stocks worth considering with the right combination of elements to beat on earnings this reporting cycle.

Canopy Growth Corporation (CGC - Free Report) has a Zacks Rank #3 and an Earnings ESP of +16.33%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Tandem Diabetes Care, Inc. (TNDM - Free Report) has a Zacks Rank of #2 and an Earnings ESP of +86.44%.

Nevro Corp. (NVRO - Free Report) is Zacks #3 Ranked and has an Earnings ESP of +3.45%.

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