Goldman Sachs has recently begun coverage on DexCom, identifying a Buy rating with a target price of $104. This optimistic outlook is part of a comprehensive analysis focused on Diabetes Medical Technology. According to Goldman Sachs, the diabetes technology sector is expected to achieve consistent double-digit growth, and DexCom (DXCM, Financial) stands to benefit significantly. The company shows promise due to its potential for consumer adoption and the ability to enhance profitability, likely becoming more evident through the end of 2025.
Furthermore, Goldman Sachs suggests that the market might be undervaluing DexCom's potential for profit and loss improvements as its gross margins expand. The analysis highlights the underappreciated opportunities in DexCom's financial model, pointing to potential gains as these factors are realized over time.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 24 analysts, the average target price for DexCom Inc (DXCM, Financial) is $99.34 with a high estimate of $115.00 and a low estimate of $82.00. The average target implies an upside of 17.07% from the current price of $84.86. More detailed estimate data can be found on the DexCom Inc (DXCM) Forecast page.
Based on the consensus recommendation from 26 brokerage firms, DexCom Inc's (DXCM, Financial) average brokerage recommendation is currently 1.7, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for DexCom Inc (DXCM, Financial) in one year is $164.82, suggesting a upside of 94.23% from the current price of $84.86. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the DexCom Inc (DXCM) Summary page.
DXCM Key Business Developments
Release Date: May 01, 2025
- Worldwide Revenue: $1.036 billion, up 12% reported and 14% organic growth compared to Q1 2024.
- US Revenue: $751 million, a 15% increase from Q1 2024.
- International Revenue: $286 million, 7% growth reported and 12% organic growth.
- Gross Profit: $596.2 million, 57.5% of revenue, down from 61.8% in Q1 2024.
- Operating Expenses: $455.3 million for Q1 2025.
- Operating Income: $143.1 million, 13.8% of revenue, compared to $140.2 million, 15.2% of revenue in Q1 2024.
- Adjusted EBITDA: $230.4 million, 22.2% of revenue, compared to 24% in Q1 2024.
- Net Income: $127.7 million or $0.32 per share.
- Cash and Cash Equivalents: Approximately $2.7 billion.
- Share Repurchase Program: Announced $750 million share repurchase program.
- Full-Year Revenue Guidance: Reaffirmed at $4.6 billion, 14% growth.
- Full-Year Gross Profit Margin Guidance: Reduced to approximately 62%.
- Full-Year Operating Margin and Adjusted EBITDA Margin Guidance: Reaffirmed at approximately 21% and 30%, respectively.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- DexCom Inc (DXCM, Financial) reported a 14% organic revenue growth in Q1 2025 compared to Q1 2024, marking the second consecutive quarter of reaccelerating revenue growth.
- The company successfully navigated short-term supply dynamics while maintaining strong demand in the US market, ensuring limited customer disruption.
- DexCom Inc (DXCM) expanded its commercial reach, leading to record levels of new customer starts, particularly from the type 2 non-insulin population.
- The introduction of Stelo, the first over-the-counter CGM, and broader coverage within the type 2 market have been well-received, enhancing customer experience.
- DexCom Inc (DXCM) announced a $750 million share repurchase program, reflecting confidence in its strong revenue and cash flow growth outlook.
Negative Points
- DexCom Inc (DXCM) received a warning letter from the FDA related to observations at its San Diego and Mesa facilities, requiring corrective actions.
- The company's gross profit margin decreased to 57.5% in Q1 2025 from 61.8% in Q1 2024, impacted by supply chain issues and increased freight costs.
- Despite strong Q1 performance, DexCom Inc (DXCM) maintained its full-year revenue guidance, indicating caution about future quarters.
- The international revenue growth was below expectations, with some choppiness due to the timing of coverage wins and supply dynamics.
- DexCom Inc (DXCM) faces ongoing inflationary pressures and potential tariff impacts, which could affect global manufacturing costs.
