California-based Dexcom (DXCM) is a global medical device company that makes glucose monitoring systems for people with diabetes. It recently introduced a new product named Dexcom ONE to expand access to healthcare for people suffering from diabetes. Additionally, the company recently received FDA clearance for two software solutions that enhance its products.
With this in mind, we used TipRanks to take a look at the latest financial performance and newly added risk factors for Dexcom. (See Top Smart Score Stocks on TipRanks)
Q3 Financial Results
Dexcom reported revenue of $650.2 million for Q3 2021, compared to $500.9 million in the same quarter last year. It posted EPS of $0.71, beating the consensus estimate of $0.63 but declining from $0.73 in the same quarter last year. Dexcom ended Q3 with $2.7 billion of liquidity, consisting of cash and a revolving credit facility. The company ended the quarter with $1.7 billion in long-term debt tied to senior convertible notes.
For full-year 2021, the company anticipates revenue in the band of $2.43 billion to $2.45 billion. (See Dexcom stock charts on TipRanks).
Risk Factors
According to the new TipRanks Risk Factors tool, Dexcom’s main risk category is Finance and Corporate, representing 33% of the total 75 risks identified for the stock. The company recently added a new risk factor under the Macro and Political category, which accounts for 5% of its total risks.
The company informs investors that it has manufacturing sites in California and Arizona and that these states have experienced annual wildfires and intensifying drought. It notes that these challenges could make it difficult for its employees to commute to work, and those working from home may experience connectivity problems due to power outages.
Dexcom further says that it has major operations in Malaysia and the Philippines and that extreme weather events in these regions could damage important infrastructure and disrupt its operations. Therefore, the company wants investors to know that climate change may have a long-term adverse effect on its business.
In an updated Legal and Regulatory risk factor, Dexcom reminds investors that it believes the way it markets and promotes its products comply with regulatory requirements. However, its marketing activities may be branded as misleading and it cautions that such could result in injunctions and significant penalties.
The Finance and Corporate risk factor’s sector average is 29%, compared to Dexcom’s 33%. The Legal and Regulatory risk factor’s sector average is 20%, compared to Dexcom’s 27%. Dexcom’s stock has gained about 45% year-to-date.
Analysts’ Take
Following Dexcom’s Q3 earnings report, Piper Sandler analyst Matthew O’Brien reiterated a Buy rating on Dexcom stock and raised the price target $750 from $675. O’Brien’s new price target suggests 40.10% upside potential.
Consensus among analysts is a Strong Buy based on 10 Buys and 3 Holds. The average Dexcom price target of $649 implies 21.23% upside potential to current levels.
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