DexCom Inc DXCM reported second-quarter sales of more than $1 billion. That’s up 15% year-over-year on a reported basis and 16% on an organic basis.
The glucose monitoring device maker reported a second-quarter adjusted EPS of 43 cents. That’s up from 34 cents a year ago, beating the consensus of 39 cents.
The company expects 2024 sales of $4.00 billion—$4.05 billion (11 – 13% organic growth), down from prior guidance of $4.20 billion—$4.35 billion versus a consensus of $4.33 billion.
William Blair writes that “the bigger surprise was that management decreased guidance by $200million-$300 million for the full year. This change we believe has led investors to question the longer-term growth profile for DexCom, and ultimately led to the stock being indicated down.”
“We remain believers in the story given our view of the market outlook and DexCom’s strong product portfolio and ecosystem. We believe the reasons for the miss and guide down are (painfully) self-inflicted, though ultimately, should prove transient and manageable. As a result, we maintain our Outperform rating,” the analyst adds.
William Blair anticipates domestic continuous glucose monitoring market growth in the high teens through 2027. The firm also expects potential for mid-20% growth in a bull case.
The analyst says DexCom can expand the market through increased coverage and reclaim recent market share losses by improving its pharmacy channel expansion and re-engaging the DME channel.
These short-term issues are expected to be temporary. William Blair foresees significant growth potential in intensive insulin users.
Price Action: DXCM stock is down 40% at $64.78 at last check Friday.
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