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On Friday, BTIG analyst Marie Thibault increased the price target on DexCom shares (NASDAQ:DXCM) to $109.00, up from $107.00, while maintaining a Buy rating on the stock. According to InvestingPro data, DexCom, currently valued at $27.55 billion by market cap, trades at a relatively high P/E ratio of 48.45, reflecting investors’ growth expectations. The stock has shown significant volatility over the past year, with a 44.52% decline, though current analysis suggests it may be undervalued. Thibault noted that DexCom is showing signs of returning to its prior performance levels, as evidenced by its first-quarter revenue of $1.036 billion, which represents a 14% year-over-year organic growth and a 12% reported increase. This figure exceeded the consensus estimate by nearly $20 million and surpassed the anticipated guidance range of $1.013 billion to $1.024 billion.
In the United States, DexCom’s revenue reached $750.5 million, a 15% year-over-year increase, which was $40 million higher than the consensus forecast of $710 million. However, international revenue of $285.8 million, although growing 12% year-over-year organically and 7% in reported terms, did not meet the $308 million consensus expectation. The focus often lies on the U.S. market, especially after the challenges faced last year, and the current results are likely to boost investor confidence in DexCom’s commercial strategies.
The company’s management highlighted a record number of new customers in the first quarter, with a significant rise in Type 2 diabetes (T2D) patients who do not use insulin. DexCom anticipates further growth in this segment, with the third major Pharmacy Benefit Manager set to cover Continuous Glucose Monitors (CGMs) for these patients in the upcoming summer. InvestingPro analysis reveals the company maintains strong financial health with a robust gross profit margin of 60.46% and has demonstrated consistent revenue growth, posting an 11.34% increase over the last twelve months. Despite a lower than expected gross margin of 57.5% due to seasonality and expedited inventory costs, DexCom is maintaining its sales outlook for 2025 at $4.6 billion, aligning with a 14% year-over-year growth, although it has revised its non-GAAP gross margin guidance to around 62%.
The adjusted earnings per share (EPS) of $0.32 for the first quarter fell short of the consensus by one cent. Nevertheless, DexCom expects to manage operating expenses effectively and is keeping its non-GAAP operating margin guidance at approximately 21% and its adjusted EBITDA margin at around 30%. With positive remarks on volume growth, patient demand, a $750 million share repurchase program, and what Thibault perceives as conservative sales guidance in light of upcoming tailwinds, such as the 15-day G7 and non-insulin adoption, BTIG remains optimistic about DexCom’s prospects. The price target adjustment to $109 is based on a 7.5x EV/Sales multiple applied to the firm’s sales estimate for the next 12-24 months. InvestingPro subscribers have access to over 10 additional exclusive ProTips about DexCom, including insights about management’s aggressive share buyback program and the company’s debt management. For a deeper understanding of DexCom’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to subscribers, which provides detailed analysis of what matters most for investment decisions.
In other recent news, DexCom, Inc. reported first-quarter revenue of $1.04 billion, surpassing analyst estimates of $1.02 billion. This marks a 12% year-over-year increase on a reported basis and a 14% increase on an organic basis. However, the company missed earnings expectations slightly, posting adjusted earnings per share of $0.32, just below the anticipated $0.33. U.S. revenue grew by 15% year-over-year, while international revenue increased by 7% on a reported basis and 12% on an organic basis. DexCom’s GAAP operating income rose to $133.7 million, representing a 190 basis point improvement from the previous year. The company has reiterated its full-year revenue guidance of $4.60 billion, aligning closely with analyst expectations. Additionally, DexCom announced a $750 million share repurchase program and updated its non-GAAP gross profit margin guidance to approximately 62% for the year. The company cited incremental costs related to supply dynamics as it works to optimize inventory levels. As of March 31, 2025, DexCom held $2.70 billion in cash, cash equivalents, and marketable securities.
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