Key points
- DexCom is a leading manufacturer of continuous glucose monitoring (CGM) systems initially serving type 1 diabetics, who represent approximately 5% of the diabetic population, while type 2 diabetics represent 95%.
- Diabetes is a growing epidemic expected to reach 780 million people worldwide by 2045.
- DexCom is expected to launch Stelo, its CGM system for type 2 diabetics that doesn’t require finger pricks, in direct competition with Abbott Lab’s Freestyle Libre.
- 5 stocks we like best from DexCom
DexCom Inc. NASDAQ: DXCM is a leading medical device company specializing in continuous glucose monitoring (CGM) systems. People with diabetes use CGM systems to monitor blood glucose levels. People with diabetes usually have to prick their finger to draw blood onto a stick to insert into a glucose monitor to get a blood sugar reading. Doing this multiple times a day can become painful, not to mention the risk of infection.
CGM systems use a small sensor inserted under the skin to provide consistent blood sugar readings throughout the day. DexCom competes with Abbott Laboratories NYSE: ABT AND Medtronic plc New York Stock Exchange: MDT.
Diabetes is a growing epidemic
There are nearly 30 million people with diabetes in the United States, with estimates that could increase to 50 million by 2030. Globally, an estimated 780 million people will have diabetes by 2045, and up to 25% of National health expenditure will be spent on diabetics. The causes can be hereditary, viral or lifestyle-related. The sugar is not processed and remains in the bloodstream because the pancreas cannot produce enough insulin.
There are 2 types of diabetes. About 5% of diabetics are type 1 and cannot produce their own insulin, must take insulin injections and require constant glucose monitoring. About 90%-95% of diabetics are type 2, meaning they are able to produce insulin but cannot use it properly. They require occasional glucose monitoring, depending on the severity.
Off-label GLP-1 popularity
GLP-1’s weight loss trend has gone as viral as diabetes drugs Novo Nordisk A/S NYSE: NVO produced Ozempic e Eli Lilly and Co. NYSE: LLY Mounjaro products are swept away for off-label use. Due to the mass popularity of weight loss usage, both companies created Wegovy and Zepbound specifically for obesity. However, the problem is that many insurers, including Medicare and Medicaid, do not reimburse these expensive medications for weight loss purposes. These GLP-1 drugs can run up to $1,300 a month for a once-a-week injection.
GLP-1 for diabetics and cardiovascular
The benefits of GLP-1 beyond blood sugar control in people with diabetes continue to be discovered. Medicare Part D covers GLP-1 for diabetes and also to reduce cardiovascular risk. The side effect of weight loss is the icing on the cake. Dexcom is a benefactor as people with diabetes need to monitor their blood sugar levels. While GLP-1 was
Targeting type 2 diabetics
While Type 1 diabetics are the ones using DexCom’s CGM systems, which are compatible with insulin pumps, the company is targeting Type 2 diabetics with the launch of Stelo. Stelo can be used by people with diabetes who are not dependent on insulin injections, which represents a much larger market. The company has submitted Stelo for FDA approval. It is expected to launch in summer 2024. It will compete directly with Abbott Lab’s Freestyle Libre fingertip-free CGM systems. Check the heat map of the sector on MarketBeat.
Aggravated growth
DexCom reported fourth-quarter 2023 earnings per share of 50 cents, beating consensus analyst estimates of 43 cents by 7 cents. Revenue grew 27% year-over-year to $1.03 billion, beating consensus estimates of $1.02 billion. Both U.S. and international revenues grew 27% year-over-year. GAAP operating income was $216.9 million, or 21% of revenues. Non-GAAP operating income was $242.7 million, or 23.5% of revenue.
DexCom Online Help
DexCom delivered full-year 2024 revenues of $4.15 billion to $4.35 billion versus consensus estimates of $4.33 billion. Non-GAAP gross profit margin will be between 63% and 64%. Non-GAAP operating margin is expected to be approximately 20%. Adjusted EBITDA margin is expected to be approximately 29%.
DexCom CEO Ken Sayer commented, “2023 was an incredible year for Dexcom with significantly expanded access, another year of record new customers, and growing momentum behind our global launch of the Dexcom G7.” Sayer concluded, “We look forward to another great year in 2024 as we strive to improve the health of significantly more people around the world with Dexcom CGM technology.”
DexCom analyst ratings and price targets I’m on MarketBeat. DexCom peers and competitor stocks can be found with MarketBeat Stock Screener.
Daily banner template
The daily candlestick chart for DXCM illustrates an ascending triangle pattern. The ascending trend line formed at $124.12 on March 6, 2024. Rising to the flat-top resistance trend line at $137.46. Lows higher than the flat-top are attempting to break out, as the rally initially peaked at $141.87. The daily relative strength index (RSI) initially peaked just below the 70 band and is stalling below it. Pullback support levels are at $133.39, $128.62, $124.12, and $119.65
Before you consider DexCom, you’ll want to hear this.
MarketBeat tracks daily Wall Street’s highest-rated and best-performing research analysts and the stocks they recommend to their clients. MarketBeat identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market takes hold… and DexCom wasn’t on the list.
While DexCom currently has a “Moderate Buy” rating among analysts, top-rated analysts believe these five stocks are better buys.
View the five stocks here
Click the link below and we’ll send you MarketBeat’s guide to investing in stocks and which pot companies are most promising.
Get this free report