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Dexcom (DXCM)
NASDAQ:DXCM

Dexcom (DXCM) AI Stock Analysis

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Dexcom

(NASDAQ:DXCM)

Rating:81Outperform
Price Target:
$97.00
▲(19.74%Upside)
Dexcom's strong financial performance, supported by robust revenue growth and efficient cost management, drives the overall stock score. The technical analysis shows positive momentum, although high valuation metrics and operational challenges present caution. Strategic initiatives and leadership changes contribute positively but are already reflected in the earnings call analysis.
Positive Factors
Financial Confidence
DXCM announced a new $750MM share buyback, indicating confidence in its financial position.
Market Expansion
The expansion to cover Type 2 non-insulin patients represents a significant growth opportunity for DXCM.
Product Innovation
DXCM received FDA approval for a 15-day product, reducing risk.
Negative Factors
Cost Pressures
DXCM lowered its FY25 GM guidance to 62% due to higher inventory replenishment costs.
Margin Challenges
Margins came in below consensus due to supply chain issues and increased shipping costs.

Dexcom (DXCM) vs. SPDR S&P 500 ETF (SPY)

Dexcom Business Overview & Revenue Model

Company DescriptionDexCom, Inc., a medical device company, focuses on the design, development, and commercialization of continuous glucose monitoring (CGM) systems in the United States and internationally. The company provides its systems for use by people with diabetes, as well as for use by healthcare providers. Its products include DexCom G6, an integrated CGM system for diabetes management; Dexcom Real-Time API, which enables invited third-party developers to integrate real-time CGM data into their digital health applications and devices; Dexcom ONE, that is designed to replace finger stick blood glucose testing for diabetes treatment decisions; and Dexcom Share, a remote monitoring system. The company's products candidature comprises Dexcom G7, a next generation G7 CGM system. DexCom, Inc. has a collaboration and license agreement with Verily Life Sciences LLC and Verily Ireland Limited to develop blood-based or interstitial glucose monitoring products. The company markets its products directly to endocrinologists, physicians, and diabetes educators. DexCom, Inc. was incorporated in 1999 and is headquartered in San Diego, California.
How the Company Makes MoneyDexcom generates revenue primarily through the sale of its continuous glucose monitoring systems and related components. The company's revenue model is centered on the direct sale of its CGM devices, which include sensors, transmitters, and receivers, to individuals with diabetes. Additionally, Dexcom engages in partnerships with healthcare providers, insurance companies, and diabetes management platforms to expand the reach and accessibility of its products. A significant portion of its earnings stems from recurring sales of disposable sensors, which need to be replaced regularly, typically every 10 days. Dexcom also benefits from collaborations with technology companies to integrate its CGM systems with various digital health platforms, enhancing user experience and expanding its market presence.

Dexcom Earnings Call Summary

Earnings Call Date:May 01, 2025
(Q1-2025)
|
% Change Since: 15.30%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong revenue growth, significant expansion in coverage for type 2 diabetes, and successful product innovations. However, challenges included a decline in gross margin due to supply chain issues and an FDA warning letter that required attention. Overall, while there are notable achievements, the presence of significant challenges suggests a balanced sentiment.
Q1-2025 Updates
Positive Updates
Strong Organic Revenue Growth
DexCom reported first quarter organic revenue growth of 14% compared to the first quarter of 2024, with U.S. revenue increasing by 15%.
Expansion in Type 2 Diabetes Coverage
DexCom secured coverage for nearly 6 million people with type 2 diabetes who are not on insulin, including coverage from the 3 largest PBMs in the U.S.
Introduction of Over-the-Counter CGM - Stelo
DexCom launched Stelo as the first over-the-counter CGM, attracting customers across the type 2 diabetes, prediabetes, and health and wellness markets.
FDA Clearance for 15 Day Dexcom G7 System
Received FDA clearance for the 15 Day Dexcom G7 System, marking a milestone with improved wear time and accuracy.
Share Repurchase Program
Announced a $750 million share repurchase program, indicating confidence in the company's financial position.
Negative Updates
Gross Margin Decline
The first quarter gross profit margin declined to 57.5% from 61.8% in the first quarter of 2024, impacted by increased freight costs and supply chain challenges.
FDA Warning Letter
Received a warning letter from the FDA related to observations during inspections of the San Diego and Mesa facilities, requiring corrective actions.
International Revenue Challenges
International revenue growth was only 7%, with some coverage wins not materializing as expected in the first quarter.
Company Guidance
During DexCom's First Quarter 2025 Earnings Call, the company reported an organic revenue growth of 14% compared to the first quarter of 2024, with worldwide revenue reaching $1.036 billion, a 12% increase on a reported basis. U.S. revenue grew by 15% to $751 million, while international revenue rose by 7% to $286 million, with organic growth at 12%. The company maintained its full-year revenue guidance of $4.6 billion, representing a 14% growth. DexCom's gross profit margin was 57.5%, down from 61.8% the previous year, primarily due to increased freight costs and inflationary pressures. Despite these challenges, DexCom reaffirmed its full-year guidance for operating margin at approximately 21% and adjusted EBITDA margin at 30%. The company also announced a $750 million share repurchase program, reflecting confidence in its cash flow outlook. DexCom's continued expansion in the type 2 non-insulin patient market, bolstered by broader insurance coverage, contributed to a record level of new customer starts, particularly from this demographic.

Dexcom Financial Statement Overview

Summary
Dexcom demonstrates strong revenue growth and efficient cost management, with a robust gross profit margin and healthy EBIT and EBITDA margins. However, the slight decrease in net profit margin and free cash flow growth indicates some pressure on profitability and cash flow, suggesting areas for improvement.
Income Statement
85
Very Positive
Dexcom has demonstrated strong revenue growth, with a 14.4% increase in TTM revenue compared to the previous year. The Gross Profit Margin remains robust at 59.4%, reflecting efficient cost management. However, the Net Profit Margin slightly decreased to 12.9% from 14.3% in the previous year, indicating some pressure on net profitability. The EBIT and EBITDA margins are healthy at 15.2% and 21.5%, respectively, showcasing operational efficiency.
Balance Sheet
78
Positive
The company maintains a solid equity base, with a Debt-to-Equity Ratio of 1.11, indicating manageable leverage levels. The Return on Equity is strong at 23.6%, highlighting effective use of equity to generate profit. The Equity Ratio is 33.6%, suggesting a balanced capital structure, though slightly lower than the previous year, indicating increased liabilities.
Cash Flow
82
Very Positive
Dexcom exhibits strong cash flow management, with a Free Cash Flow of $575.2 million in TTM. The Free Cash Flow Growth Rate stands at -8.8%, indicating a slight decline compared to the previous period. The Operating Cash Flow to Net Income Ratio is robust at 1.8, demonstrating strong cash generation relative to net income. The Free Cash Flow to Net Income Ratio is 1.1, reflecting efficient cash utilization.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
4.15B4.03B3.62B2.91B2.45B1.93B
Gross Profit
2.46B2.47B2.29B1.88B1.68B1.28B
EBIT
632.60M600.00M597.70M391.20M175.40M299.50M
EBITDA
889.80M945.70M916.70M565.30M377.50M376.80M
Net Income Common Stockholders
535.20M576.20M541.50M341.20M154.70M493.60M
Balance SheetCash, Cash Equivalents and Short-Term Investments
2.70B2.58B2.72B2.46B2.73B2.71B
Total Assets
6.75B6.48B6.26B5.39B4.86B4.29B
Total Debt
2.58B2.59B2.59B2.09B1.82B1.84B
Net Debt
1.68B1.98B2.03B1.44B769.20M1.02B
Total Liabilities
4.49B4.38B4.20B3.26B2.61B2.46B
Stockholders Equity
2.27B2.10B2.07B2.13B2.25B1.83B
Cash FlowFree Cash Flow
575.20M630.70M511.90M304.70M53.30M276.60M
Operating Cash Flow
964.10M989.50M748.50M669.50M442.50M475.60M
Investing Cash Flow
-182.10M-207.50M-507.20M-521.50M-216.10M-1.02B
Financing Cash Flow
-727.00M-734.80M-318.60M-552.50M10.40M912.10M

Dexcom Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price81.01
Price Trends
50DMA
79.01
Positive
100DMA
79.30
Positive
200DMA
76.78
Positive
Market Momentum
MACD
0.32
Positive
RSI
43.15
Neutral
STOCH
13.87
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DXCM, the sentiment is Neutral. The current price of 81.01 is below the 20-day moving average (MA) of 84.58, above the 50-day MA of 79.01, and above the 200-day MA of 76.78, indicating a neutral trend. The MACD of 0.32 indicates Positive momentum. The RSI at 43.15 is Neutral, neither overbought nor oversold. The STOCH value of 13.87 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DXCM.

Dexcom Risk Analysis

Dexcom disclosed 74 risk factors in its most recent earnings report. Dexcom reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Dexcom Peers Comparison

Overall Rating
UnderperformOutperform
Sector (54)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
81
Outperform
$32.09B60.8123.72%9.11%-17.87%
STSTE
80
Outperform
$23.24B37.239.46%0.96%0.32%64.36%
76
Outperform
$21.24B54.3137.92%23.49%71.25%
EWEW
71
Outperform
$42.98B49.4316.73%-9.84%-35.77%
54
Neutral
$5.24B3.26-44.35%6.48%16.78%-0.10%
PHPHG
50
Neutral
$21.22B-7.10%4.02%-0.76%-55.03%
50
Neutral
$1.36B-92.31%27.65%-28.22%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
DXCM
Dexcom
81.01
-35.06
-30.21%
EW
Edwards Lifesciences
73.98
-14.86
-16.73%
PODD
Insulet
301.79
102.48
51.42%
PHG
Koninklijke Philips
22.06
-3.37
-13.25%
STE
Steris
236.23
19.09
8.79%
TNDM
Tandem Diabetes Care
20.40
-22.17
-52.08%

Dexcom Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
Dexcom Promotes Jacob S. Leach to President and COO
Positive
May 13, 2025

On May 9, 2025, Dexcom announced the promotion of Jacob S. Leach to President and Chief Operating Officer, effective immediately. Leach, who has been with the company for over 21 years, will now oversee corporate development and strategy efforts in addition to his existing responsibilities. This move is expected to strengthen Dexcom’s ability to innovate and achieve its goals in the metabolic health sector, benefiting customers, shareholders, and communities.

The most recent analyst rating on (DXCM) stock is a Buy with a $132.00 price target. To see the full list of analyst forecasts on Dexcom stock, see the DXCM Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Dexcom Stockholders Approve Equity Plan Amendments
Neutral
May 9, 2025

On May 8, 2025, Dexcom‘s stockholders approved amendments to the 2015 Equity Incentive Plan and the Employee Stock Purchase Plan, increasing the shares reserved for issuance by 3.4 million and 8 million respectively. Additionally, the board size was reduced to nine directors, and various proposals including the election of directors, ratification of Deloitte & Touche LLP as auditors, and executive compensation were approved.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.