DexCom, Inc. DXCM is scheduled to release second-quarter 2025 results on July 30, after the closing bell. In the last reported quarter, the company’s earnings missed estimates by 3.03%.
The bottom line outpaced the consensus mark in two of the trailing four quarters and missed twice, delivering an average surprise of 0.47%.
Shares of DXCM have gained 11.1% so far this year against the industry’s 10.2% decline. The S&P 500 Index has increased 6.9% in the same time frame.
Image Source: Zacks Investment ResearchQ2 Estimates
Currently, the Zacks Consensus Estimate for revenues is pegged at $1.12 billion, indicating growth of 11.8% from the year-ago quarter’s reported figure. The consensus mark for earnings is pinned at 45 cents per share, implying 4.7% growth year over year.
Factors to Note
DexCom’s second-quarter 2025 outlook remains promising, with multiple tailwinds supporting potential growth. The expansion of the U.S. prescriber base, strong international performance and the growing traction of Stelo are key factors driving optimism. Additionally, FDA approval for the 15-day G7 CGM could have provided a boost. While challenges such as competitive pressures and channel mix shifts remain, DexCom appears well-positioned to have accelerated growth and improved financial performance in the quarter.
U.S. Market Dynamics
DXCM’s quarterly performance is likely to have been shaped by expanded coverage. The company’s CGM for anybody with diabetes is covered by two of the three largest PBMs since January, which might have led to higher adoption during the soon-to-be-reported quarter. Moreover, the company's ongoing sales force expansion and efforts to stabilize its presence in the Durable Medical Equipment (“DME”) channel should have aided demand.
DexCom reported a record number of new patient starts in the past two quarters, which signals improving commercial execution. Strong U.S. demand on the back of increasing patient base is expected to have contributed significantly in the soon-to-be-reported quarter.
International Market Expansion
DexCom’s international segment showed resilience, growing 7% year over year in the last reported quarter, driven by coverage expansion for type 2 diabetes patients. Continued growth in Japanese business and rising adoption of Dexcom ONE in France are likely to have boosted international sales in the second quarter.
Stelo: A Game-Changer for the Non-Insulin Market
One of DexCom’s most promising growth drivers for the second quarter is likely to have been Stelo, the over-the-counter continuous glucose monitor (CGM) for people with prediabetes and Type 2 diabetes who are not on insulin.
DXCM is expanding adoption of Stelo through product iteration, broad awareness campaigns and new distribution channels, including its introduction on the Amazon storefront. The company is building on the Stelo experience through targeted partnerships that will help consolidate multiple biomarkers into its platform. This includes the recently announced relationship with ??URA, which will integrate Dexcom glucose data with vital sign, sleep, stress, heart health and activity data from the Oura Ring to provide an even broader picture of health for our mutual customers. The company expects Stelo sales to rise 2-3% in 2025.
Financial Outlook and Margin Expansion
On its first-quarter earnings call, DexCom reiterated its full-year 2025 revenue guidance of $4.6 billion, representing organic growth of 14%. The company expects margin improvement to continue in 2025 as it converts more of its installed base to G7 and drives greater scale at high-volume manufacturing facilities. DXCM expects gross margin to be approximately 62% and operating margin to be 21% for 2025. The anticipated improvement in sales and margin is likely to be reflected in the upcoming quarterly results.
DexCom, Inc. Price and EPS Surprise
DexCom, Inc. price-eps-surprise | DexCom, Inc. Quote
What Our Quantitative Model Suggests
Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: DexCom has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #2 at present.
Stocks Worth a Look
Here are a few medical stocks worth considering, as these have the right combination of elements to come up with an earnings beat this reporting cycle.
GeneDx Holdings WGS has an Earnings ESP of +5.26% and a Zacks Rank #2 at present. The company is slated to release second-quarter 2025 results on July 29.
WGS’ earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 145.82%. The Zacks Consensus Estimate for the company’s second-quarter EPS may increase 190.9% from the year-ago quarter’s figure.
Cencora COR has an Earnings ESP of +1.49% and a Zacks Rank #2 at present. The company is set to release third-quarter fiscal 2025 results on Aug. 6.
COR’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 6%. The Zacks Consensus Estimate for COR’s fiscal third-quarter EPS may surge 13.2% from the year-ago reported figure.
Cardinal Health CAH has an Earnings ESP of +0.81% and a Zacks Rank #2 at present. The company is slated to release fourth-quarter fiscal 2025 results on Aug. 12.
CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 10.3%. The Zacks Consensus Estimate for the company’s fiscal fourth-quarter EPS may increase 10.3% from the year-ago quarter figure.
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Cardinal Health, Inc. (CAH): Free Stock Analysis Report DexCom, Inc. (DXCM): Free Stock Analysis Report Cencora, Inc. (COR): Free Stock Analysis Report GeneDx Holdings Corp. (WGS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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