DexCom Disappoints with Quarterly Results Despite Solid Product Innovation

The stock of the highly specialized healthcare company DexCom came under pressure on Friday, losing almost 2% of its value by the close of trading. This was due to the recent quarterly figures, which left investors concerned about slowed revenue growth. In contrast, the S&P 500 Index managed to hold its own against the DexCom stock and closed unchanged from the previous day. On Thursday evening, after the close of the stock market, DexCom released its results for the third quarter. The company reported revenue of $994 million, representing just a 2% increase year-over-year. These figures were disappointing given the past rapid growth gains in the area of glucose monitoring products. The adjusted net income according to Non-GAAP decreased to just over $181 million, compared to $204 million in the previous year. According to speculative forecasts from Zacks, the consensus of analysts' estimates for earnings was $0.43 per share, which DexCom only slightly exceeded. In contrast, DexCom managed to slightly surpass the average analysts' forecasts for revenue numbers. In the last quarter, DexCom launched a new product called Stelo, a glucose biosensor for adult patients with prediabetes and type 2 diabetes who are not receiving insulin therapy. This is the first product of its kind available over-the-counter in the U.S. This market launch, along with new products in Australia and France, significantly contributed to revenue growth. For the entire year 2024, DexCom forecasts revenue of approximately $4 to $4.05 billion, which would correspond to a growth of at least 11% compared to 2023. The adjusted operating margin is expected to settle around 20%; however, more specific details regarding profitability were not provided. Overall, it is evident that investors had higher expectations for DexCom. Despite the attractive new product line, particularly Stelo, the company remains challenged to increase revenue figures to better compete in the demanding market.