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DexCom (DXCM) to Report Q1 Earnings: What's in the Offing?

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DexCom, Inc. DXCM is scheduled to release first-quarter 2020 results on Apr 28, after the closing bell. In the last reported quarter, the company delivered a positive earnings surprise of 53.3%. Further, it has a trailing four-quarter positive earnings surprise of 128.3%, on average.

Q1 Estimates

Currently, the Zacks Consensus Estimate for first-quarter revenues is pegged at $356.5 million, suggesting growth of 27.1% from the year-ago reported number. The consensus estimate for earnings is pegged at 10 cents per share, indicating an improvement of 300% from the year-ago reported figure.

Key Catalysts

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

In fact, the company projects total revenues in the range of $1.73-$1.78 billion, indicating an improvement of 17-20% in 2020 and we expect this trend to get reflected in to the to-be-reported quarter.

DexCom, Inc. Price and EPS Surprise

 

DexCom, Inc. Price and EPS Surprise

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

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

Per management, in September 2019, the company started selling G6 in Canada and received a remarkable response to the launch. In early October, DexCom officially began shipping G6 to its Medicare patients.

Dexcom’s Insulet and Lilly diabetes management products have also been progressing well. The company’s commercial agreement with Eli Lilly was officially signed in December 2019. This highlighted a significant step toward bringing their system to market with G6, which will initially focus on a smart pen offering.

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 lucrative prospects in the future on the back of improving global access and awareness. This is likely to have contributed to international revenues in the first quarter.

The company first-quarter operating margins are likely to have gained improved operational discipline. Adjusted operating margin is projected to be about 13% of net revenues in 2020.

However, increase in operating expenses and intense competition is likely to have weighed on the company’s first-quarter performance.

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 +143.9%. 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.

Other Stocks Worth a Look

Here are a few other medical stocks worth considering as these too have the right combination of elements to post an earnings beat this quarter.

Chemed Corporation CHE has an Earnings ESP of +0.42% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Aphria Inc. APHA has an Earnings ESP of +35.71% and a Zacks Rank #2.

Baxter International Inc. BAX has an Earnings ESP of +0.31% and a Zacks Rank of 3.

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