On Tuesday, RBC Capital began coverage on DexCom (NASDAQ:DXCM), a medical technology company specializing in continuous glucose monitors (CGM) for diabetes management. The firm assigned an Outperform rating to the company's stock with a price target of $165.00.
DexCom, recognized for its leading position in the MedTech sector, is focused on addressing the growing diabetes market, which is nearing an endemic level. RBC Capital sees a significant opportunity for the expansion of the total addressable market (TAM) for CGM, driven by innovation, broader indications, geographic reach, and the potential for monitoring metrics beyond glucose levels.
The company is expected to remain on a path of rapid growth among large-cap MedTech firms. RBC Capital highlighted immediate growth drivers for DexCom, including its Stelo product, the first CGM available without a prescription, and the increasing adoption of GLP-1 treatments.
According to RBC Capital, DexCom is well-positioned to achieve substantial operating margin (OM) expansion over time, potentially reaching industry-leading levels. The firm anticipates that DexCom's financial estimates could be revised upwards, which might also lead to an expansion of the company's stock multiples.
The Outperform rating and $165 price target reflect RBC Capital's positive outlook on DexCom's prospects, as it continues to innovate and expand in the global MedTech industry.
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