On Friday, Bernstein SocGen Group adjusted its stock price target for DexCom (NASDAQ: DXCM), a medical device company specializing in glucose monitoring systems. The new price target is set at $86.00, up from the previous $82.00, while the firm maintained a Market Perform rating on the stock.
The revision follows DexCom's recent financial performance, which showed a 3% organic revenue growth, meeting the high end of the company's revised expectations announced during the Q2 earnings call. Despite a 2% decline in U.S. sales due to rebate dynamics, which are expected to lessen over the coming quarters, the company witnessed a robust approximately 16% organic growth in international sales.
DexCom reaffirmed its full-year 2024 guidance, projecting 11% to 13% organic sales growth. The company remains confident in achieving the lower end of its long-range plan for 2025, targeting $4.6 billion in revenue. This optimism is partly due to the company's successful expansion of its sales force, which has added nearly 35,000 clinicians to its prescriber base since April.
In the past quarter, DexCom experienced some market share loss, which stabilized by September. The management is actively working to mend durable medical equipment (DME) vendor relationships, with expectations for gradual improvements.
The company's new product, Stelo, has been well received by users, with approximately 70,000 individuals using the system and half opting for a subscription model. DexCom is also broadening its distribution channels through business-to-business sales and partnerships with DME vendors.
Moreover, DexCom has submitted its 15-day G7 glucose monitoring system to the FDA for approval. Although specific timelines for the approval process were not disclosed, the submission marks a significant step forward for the company.
In other recent news, DexCom reported a slight revenue increase in Q3 to $994.2 million, surpassing consensus estimates. This was primarily driven by international sales, despite a shortfall in the U.S. market. The company confirmed its full-year 2024 guidance and forecasts Q4 revenues in the range of $1.080 billion to $1.130 billion.
Analysts from Canaccord Genuity and BTIG maintained their Buy ratings, while RBC Capital lowered its price target but kept an Outperform rating. DexCom also launched its new Stelo product and submitted its 15-day wear G7 to the FDA for review.
Analysts anticipate that Stelo will generate approximately $126 million in revenue by fiscal year 2025. These developments demonstrate DexCom's ongoing efforts to navigate the dynamic landscape of the diabetes management market.
InvestingPro Insights
DexCom's recent financial performance and market positioning are reflected in the latest InvestingPro data and tips. Despite the stock taking a significant hit over the last six months, with a -45.76% price total return, DexCom maintains a strong market presence with a market capitalization of $29.99 billion. The company's revenue growth of 23.05% over the last twelve months aligns with its guidance for organic sales growth.
An InvestingPro Tip highlights that DexCom is trading at a low P/E ratio relative to its near-term earnings growth, with a PEG ratio of 0.52. This suggests potential undervaluation, especially considering the company's reaffirmed guidance and long-range plan. Moreover, DexCom's strong financial health is evident from another InvestingPro Tip indicating that its liquid assets exceed short-term obligations, providing financial flexibility as it expands its product line and distribution channels.
For investors seeking a deeper understanding of DexCom's potential, InvestingPro offers 11 additional tips, providing a comprehensive analysis of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.