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With a market cap of about $46.4 billion, DexCom, Inc. (DXCM) is a leading medical device company specializing in continuous glucose monitoring (CGM) systems for diabetes management. Based in San Diego, California, the company designs and develops advanced CGM products to provide real-time glucose data and insights for both patients and healthcare providers.
Companies valued at $10 billion or more are generally classified as “large-cap” stocks, and DexCom fits this criterion perfectly. DexCom is renowned for its market-leading CGM systems like the Dexcom G6 and G7. The company has over 5,000 employees and operates globally with significant revenue from its innovative CGM technology and devices, which support hundreds of thousands of users worldwide.
However, DexCom's shares have declined by 17.9% from its 52-week high of $142 reached in March. Shares of DXCM are down 12.6% over the past three months, underperforming the broader US Medical Devices iShares ETF (IHI), which only dipped by 1.6% in the same period.
In the longer term, shares of DXCM faced a 6% decline on a YTD basis, trailing behind the IHI's 4.5% gain. Plus, over the past 52 weeks, DXCM's shares have plunged 8.8%, compared to IHI’s return of 1.5%.
DXCM has been in a bearish trend, trading below its 50-day moving average since late April. However, despite some recent fluctuations, it has consistently stayed above its 200-day moving average since November last year.
DXCM has underperformed primarily due to concerns about competitive pressures from other healthcare companies in the diabetes management sector and uncertainties surrounding the effectiveness of new obesity drugs on CGM device usage. Moreover, the stock tumbled nearly 9.9% following its Q1 earnings result on Apr. 25, primarily due to the company's annual sales forecast for 2024, which was below analysts' expectations despite beating earnings and revenue estimates for the quarter.
To emphasize the stock's underperformance, DXCM’s rival, Medtronic plc (MDT), has seen a marginal decline on a YTD basis and a 7.6% drop over the past 52 weeks, which is less pronounced compared to DXCM's sharp declines in both periods.
Despite DXCM’s relative underperformance, analysts are highly optimistic about the stock's prospects. The stock has a consensus rating of “Strong Buy” from the 22 analysts covering it, and the mean price target of $149.86 suggests a premium of 28.5% to current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
