Dexcom's Sales Growth Is Slowing, And The Top 2% Stock Just Skidded
Dexcom is a company that makes continuous glucose monitors, which are devices that help manage diabetes. The company is benefitting from the shift to these devices in diabetes management.
Dexcom's (DXCM), adjusted earnings for the quarter ended Thursday fell short of expectations, but it was still a big beat. Dexcom's stock fell.
Analysts polled by FactSet on average expected the diabetes device giant to earn 15cents per share, excluding certain items. Dexcom's profit was 17 cents per share. However, it fell short of the most optimistic projections (20 cents).
Sales rose 18%, to $741.55 million. This easily exceeded the forecast of $720.7 millions.
Dexcom's stock fell 3.7% in today's after-hours trades on the stock market. It was near 119. According to MarketSmith.com, shares are consolidating at 125.65 with a buying point.
Dexcom Stock: Sales Growth Slows
Dexcom's quarterly sales have grown by 17% to 18% for the past four quarters. This is a slowdown from the earlier growth rate of 25-31%. Investors in Dexcom stocks may be concerned about the slowdown.
The company claims that it is still very early in the business of continuous glucose monitors, or CGMs. CGMs monitor blood sugar levels in real-time. These devices can be used in conjunction with insulin pumps to ease diabetes management.
CGMs were historically used mostly in the market for type 1 diabetes. The body of a patient with this genetic form does not produce its own insulin. Patients are dependent on insulin pumps and multiple daily injections. Type 2 diabetes is progressive.
The Centers for Medicare & Medicaid Services now covers a larger group of patients who have the progressive condition. Dexcom's stock rose 9.5% after the decision was made on March 2.
Raising the Full-Year Guidance
Dexcom has also launched in the U.S. a new CGM called G7.
Dexcom has raised its outlook for the full year in response to strong demand and the new CGM coverage. The company now expects sales between $3.4 and $3.52 billion. Analysts at Dexcom projected $1.06 per share in earnings and $3.47billion in sales.
Dexcom's sales forecast for the three months prior was $3.35 to $3.49 Billion.
Dexcom has an almost perfect IBD Digital Composite rating of 98. This means that shares are in the top 2% in terms of both fundamental and technical metrics.