Dexcom stock pared steep losses Friday after the diabetes devices player beat Wall Street's third-quarter expectations and reiterated its outlook for the year.
The report follows the launch of Dexcom's newest continuous glucose monitor, or CGM, known as Stelo. The body-worn device helps measure glucose levels in real time. But unlike Dexcom's other offerings, it's tailored for people with prediabetes or type 2 diabetes not requiring insulin.
That launch could be more complicated in 2025, however. Dexcom announced Chief Commercial Officer Teri Lawver will retire at the end of the year. Lawver will serve as a special advisor through early 2025. Chief Executive Kevin Sayer will lead commercial efforts while the company looks for a new chief commercial officer.
William Blair analyst Margaret Kaczor Andrew is confident in Sayer's ability.
"Having led the organization previously as chief operating officer from 2013 to 2015, we remain confident in his and management's ability to show progress on their commercial execution over the next several quarters," she said in a report to clients.
Dexcom stock closed down 1.9% at 73.44. That narrowed from a big tumbled in after-hours action Thursday following the company's third-quarter report.
Dexcom Stock Dives Despite Strong Report
In the September quarter, Dexcom earned an adjusted 45 cents a share, beating expectations by two pennies. Earnings dipped 14% year over year. Sales edged 2% higher to $994.2 million, topping the Street view for $990 million, according to FactSet.
Organically, sales advanced 3% vs. the year-ago period.
William Blair's Andrew noted U.S. sales took a 6% hit — or roughly $40 million — as patients cashed in on rebates. But Dexcom expected this, she said.
"While the headline revenue number was unsurprising, with the majority of revenues in any given quarter stemming from its install base of patients from the prior quarter, the financial results suggested underlying dynamics have likely stabilized," she said.
To that point, she noted Dexcom reported a record number of new patients started using a Dexcom CGM. This doesn't include the 70,000 Stelo users to date. The company has also added almost 35,000 clinicians to its prescribing base since April.
"Though there is more wood to chop, we believe the stabilization in September (and encouraging commentary through October) demonstrates the early signs of their recovery, which is expected to remain stable through the end of the year," she said.
Andrew has an outperform rating on Dexcom stock.
2025 Goals Look Achievable
Dexcom also reiterated its guidance for the year. The company calls for $4 billion to $4.05 billion in sales, vs. Dexcom stock analysts' projection for $4.01 billion. That represents 11% to 13% organic sales growth.
The company also expects to hit the low end of its 2025 sales guidance for $4.6 billion and achieve its adjusted gross operating and earnings before interest, taxes, depreciation and amortization margin goals. The guidance should be "achievable if not conservative," Andrew said.
"While management emphasized that is not the internal goal, it believes no additional share capture is needed to hit the 2025 target," she said.
Several key moves could put Dexcom over the top in 2025, however. The company is launching the biggest salesforce expansion in its history, Stelo will have time to fully ramp and contribute to sales and it could win approval for a 15-day sensor for its G7 CGM.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
