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Thursday, BTIG reiterated its Buy rating on DexCom (NASDAQ:DXCM) with a price target of $120.00. The medical device company, currently valued at $27.49 billion, has demonstrated strong financial health according to InvestingPro analysis, though it trades at a relatively high P/E ratio of 48.09. DexCom recently announced the FDA approval of its 15-day G7 sensor for adults with diabetes, an advancement that aligns it with Abbott's Libre in terms of wear period. The G7 sensor demonstrated a Mean Absolute Relative Difference (MARD) of 8.0%, surpassing integrated Continuous Glucose Monitoring (iCGM) performance standards. This development comes as the company maintains solid revenue growth of 11.34% over the last twelve months, with InvestingPro reporting a robust gross profit margin of 60.46%.
The FDA clearance, notable for its issuance despite an existing warning letter, is seen as a positive development. DexCom plans to introduce the G7 system to the U.S. market in the latter half of the year. The company had intentionally delayed the launch following approval to ensure the sensor's compatibility with automated insulin delivery systems and to establish comprehensive reimbursement through pharmacy and Durable Medical (TASE:BLWV) Equipment (DME) channels.
The transition from a 10-day to a 15-day sensor is expected to cut the Cost of Goods Sold (COGS) by approximately 33%, although DexCom will also assume warranty responsibilities for the additional five days. BTIG anticipates that the financial benefits from the extended wear time will become more evident in FY26 as the product gains market presence.
BTIG has made no changes to its financial estimates for DexCom and reiterates its Buy rating on the company's stock. The analyst's commentary highlights the strategic timing of the product's launch and the potential cost savings associated with the longer wear period, while maintaining confidence in the stock's performance. For deeper insights into DexCom's valuation and growth prospects, investors can access comprehensive analysis and 13 additional ProTips through InvestingPro's detailed research reports, which provide expert analysis on over 1,400 US stocks.
In other recent news, DexCom received FDA clearance for its Dexcom G7 15 Day Continuous Glucose Monitoring System, which is expected to launch in the second half of 2025. This system is highlighted as the longest-lasting and most accurate CGM device, offering a 15.5-day wear period and a Mean Absolute Relative Difference of 8.0%. Stifel analysts reiterated a Buy rating with a $100 price target, noting the approval as significant for DexCom’s financial outlook and margin potential. Mizuho (NYSE:MFG) Securities also initiated coverage with an Outperform rating and an $85 price target, citing strong CGM adoption and positive feedback from physicians. The G7 device is anticipated to capture a significant portion of the growing CGM market, with potential for further expansion through DexCom's Stelo product.
Additionally, DexCom announced a change in its independent accounting firm, replacing Ernst & Young LLP with Deloitte & Touche LLP for the fiscal year ending December 31, 2025. The company reported no disagreements with EY regarding accounting principles or audit scope during their tenure. This transition comes as part of DexCom's corporate governance practices. These developments reflect DexCom's ongoing efforts to enhance its market position and financial performance in the glucose monitoring sector.
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