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Investing.com - BTIG lowered its price target on DexCom (NASDAQ:DXCM) to $85 from $109 on Friday, while maintaining a Buy rating following the company’s third-quarter earnings report. The new target represents significant upside from DexCom’s current trading price of $68.20, with the company currently valued at approximately $26.7 billion.
DexCom reported third-quarter revenue of $1.209 billion, representing 20% organic year-over-year growth and exceeding consensus estimates by $30 million. U.S. revenue reached $851.9 million, up 21% year-over-year, while international revenue grew 18% organically to $357.4 million. This performance continues DexCom’s strong trajectory, with InvestingPro data showing 9.3% revenue growth over the last twelve months to $4.3 billion, supported by a healthy gross profit margin of 58.8%.
The company raised its full-year sales guidance to between $4.630 billion and $4.650 billion, up from its previous range of $4.600 billion to $4.625 billion, reflecting approximately 15% year-over-year growth. However, DexCom trimmed its outlook for non-GAAP gross margins to 61% from 62%, and adjusted its EBIT margin forecast to 20-21% from 21%.
BTIG noted that investor concerns were confirmed during the earnings call, including lower-than-expected 2026 sales growth projections and some impact on new patient starts related to perceived accuracy issues, though these starts remained strong and just below record levels.
Despite these challenges, BTIG believes DexCom’s profitability, product pipeline, market position, and potential tailwinds make it a high-quality investment, with the firm applying the peer group average multiple of approximately 5.5x EV/Sales to arrive at its new price target. InvestingPro analysis indicates DexCom is currently undervalued compared to its Fair Value, with a strong analyst consensus rating of 1.44 (Buy). InvestingPro also highlights that DexCom is "Trading at a high earnings multiple" with a P/E ratio of 47.9, one of several key insights available in DexCom’s comprehensive Pro Research Report, part of the 1,400+ US equities covered in-depth on InvestingPro.
In other recent news, DexCom Inc. reported its third-quarter earnings for 2025, exceeding analysts’ expectations. The company achieved an earnings per share (EPS) of $0.61, surpassing the forecasted $0.57, resulting in a 7.02% earnings surprise. Revenue also outperformed predictions, reaching $1.21 billion compared to the anticipated $1.18 billion, marking a 2.54% surprise. Despite these positive results, DexCom missed expectations on gross and operating margins, although operating profits aligned with forecasts due to strong revenue performance.
Canaccord Genuity responded to these developments by lowering its price target for DexCom from $106 to $99, while maintaining a Buy rating. The adjustment was attributed to concerns over quality costs impacting margins. These recent developments highlight the mixed financial performance of DexCom, with strong revenue growth but challenges in maintaining expected margins.
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