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Valued at a market cap of $27.4 billion, DexCom, Inc. (DXCM) operates in the medical devices sector. The California-based company specializes in continuous glucose monitoring systems that provide real-time blood glucose data to aid diabetes management.
Companies valued at $10 billion or more are generally considered “large-cap” stocks, and DexCom fits this criterion perfectly, exceeding the mark. DexCom is renowned for its advanced continuous glucose monitoring systems, including the Dexcom G6 and G7, which provide real-time glucose data and trend insights, transforming diabetes management with over 20,000 users in its Dexcom Warrior community.
However, the diabetes care technology leader has experienced a decline, slipping 51.5% from its 52-week high of $142 reached in March. Over the past three months, its shares have decreased by 41.3%, underperforming the broader S&P 500 Index's ($SPX) 3.2% gain during the same period.
Longer term, DXCM has declined 44.5% on a YTD basis, significantly lagging behind the SPX's 17.3% gains. Moreover, DexCom's shares have dipped 34.4% over the past 52 weeks, compared to SPX's 25.4% return in the same period.
To confirm the bearish price trend, DXCM has been trading below its 50-day moving average since late April. Also, it remained below its 200-day moving average since late June.
DexCom has underperformed due to short-term issues such as slower-than-expected adoption of its G7 system and higher-than-anticipated rebate usage, compounded by increased competition and market concerns. Furthermore, despite beating Q2 adjusted profit estimates on Jul. 25, DexCom's stock crashed 40.7% the following day due to a lower-than-expected revenue of $1 billion and a significant reduction in its full-year 2024 revenue guidance to $4 billion-$4.1 billion. Additionally, concerns about losing market share in the durable medical equipment channel and the impact of GLP-1 drugs on new patient acquisition contributed to investor disappointment.
In addition, its rival, Insulet Corporation (PODD), has outperformed DexCom. Insulet shares have risen by 31.3% over the past 52 weeks and are up 6.2% on a YTD basis.
Despite the stock’s relatively weak price action, analysts are highly optimistic about DXCM’s prospects. The stock has a consensus rating of “Strong Buy” from the 22 analysts in coverage, and the mean price target of $96.18 is a premium of 39.8% 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.
