Oppenheimer downgrades DexCom stock rating to Perform on competition concerns

Investing.com - Oppenheimer downgraded DexCom (NASDAQ:DXCM) stock rating from Outperform to Perform on Monday, citing multiple challenges facing the continuous glucose monitoring device maker. According to InvestingPro data, DexCom currently trades at a high earnings multiple of 55x, with analysts maintaining a strong buy consensus and a 27% upside potential to their target price.

The downgrade comes amid rising concerns about the accuracy and performance of DexCom’s G7 device, according to Oppenheimer’s field checks. The research firm identified this as one of several "organic issues" facing the company. Despite these concerns, DexCom maintains strong financials with a 59% gross profit margin and 9.3% revenue growth in the last twelve months.

Competitive pressures were also highlighted in the downgrade rationale, specifically Abbott’s glucose-ketone dual analyte sensor and L3 pump integrations, which Oppenheimer believes could complicate DexCom’s gains in the Type 1 diabetes market. The firm also questioned the value proposition of DexCom’s G8 device, which is approximately four years away from release.

Oppenheimer expressed concerns about structural risks, particularly competitive bidding in the durable medical equipment (DME) channel, which could have significant margin implications for DexCom, potentially more severe than for Abbott.

The research firm also noted challenges in the over-the-counter continuous glucose monitoring segment, citing "higher price elasticity of demand" and "lack of predictability of new patient adds" as factors making this a less appealing market segment for DexCom. For detailed analysis and additional insights, including 11 more ProTips and comprehensive financial metrics, check out the full DexCom research report on InvestingPro.

In other recent news, DexCom reported strong financial results for the second quarter of 2025, with earnings per share reaching $0.48, surpassing the expected $0.45. Revenue also exceeded forecasts, coming in at $1.16 billion compared to the anticipated $1.12 billion. UBS responded to these results by raising its price target for DexCom to $106 from $105, maintaining a Buy rating on the company’s shares. Piper Sandler reiterated an Overweight rating on DexCom, setting a price target of $100, while addressing potential challenges from competitors and regulatory proposals. Additionally, Argus Research initiated coverage on DexCom with a Buy rating and a price target of $100, citing the company’s strong position in diabetes monitoring. These developments highlight the continued interest and positive outlook from analysts on DexCom’s performance and market position.

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