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DexCom Estimates Strong Revenue Figures for Q4 and 2017


DexCom, Inc. DXCM reported preliminary, unaudited revenues of approximately $218 million for the fourth quarter ended Dec 31, 2017. The revenue figure is higher than the Zacks Consensus Estimate of $211.9 million, which reflects an improvement of 28% from the fourth quarter of 2016.

For fiscal 2017, total preliminary, unaudited revenues are expected to total $715 million, up 25% over 2016 levels. The full-year figure is well above the Zacks Consensus estimate of $710.63 million.

Meanwhile, the estimate revision trend has been favorable as one estimate moved south over the past two months, with two movements in the opposite direction. In fact, the current year estimates narrowed down 2 cents to a loss of 63 cents per share. The stock has a Zacks Rank #3 (Hold).

DexCom, Inc. Price and Consensus

DexCom, Inc. Price and Consensus | DexCom, Inc. Quote

2018 Outlook

For 2018, DexCom estimates total revenues in the range of $830-$850 million, courtesy of strong sensor volumes, international revenues and the expansion of DexCom’s worldwide patient base. Meanwhile, the Zacks Consensus Estimate for 2018 revenues is pegged at $856 million at the moment.

Dexcom’s launch of G6 sensor platform and expansionary moves in the Medicare and international markets are likely to boost revenues in 2018. However, cutthroat competition in the niche space is likely to mar the top line.

Shares Fall

However, the market is not really happy with DexCom’s preliminary results for the fourth quarter and full-year 2017. Following the announcement, the stock tumbled 1.5% in the last trading session to close at $54.60. The company is likely to report full financial results on Feb 27, 2018, after the market closes.

DexCom’s price movement in the past year has been unimpressive. The company reported a negative return of 20.9%, comparing unfavorably with the industry’s rally of 26%. The current level is also lower than the S&P 500’s gain of 23.7% over the same time frame. DexCom’s glucose monitoring devices are more invasive and better than other self-monitored glucose testing systems. Moreover, reports suggest that patients are unwilling to realize the benefits of continuous glucose monitoring at the moment. Reluctance on the part of physicians and patients to adopt DexCom’s products may make it challenging for the company to expand market share.

Key Picks

A few better-ranked stocks in the broader medical sector are Integer Holdings Corporation ITGR, Bio-Rad Laboratories, Inc. BIO and Intuitive Surgical, Inc. ISRG.

Bio-Rad Laboratories flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The company has a long-term expected earnings growth rate of 25%.

Integer Holdings has a long-term expected earnings growth rate of 15%. The stock carries a Zacks Rank #2 (Buy).

Intuitive Surgical has a long-term expected earnings growth rate of 9.2%. The stock carries a Zacks Rank #2.

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