DXCM Q4 Earnings to Reflect Market Expansion & Stelo Impact?

DexCom, Inc. DXCM is scheduled to release fourth-quarter 2024 results on Feb. 13, after the closing bell. In the last reported quarter, the company’s earnings beat estimates by 4.65%.The bottom line also outpaced the consensus mark in each of the trailing four quarters, delivering an average surprise of 12.43%.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Shares of DXCM have gained 23.4% in the past six months compared with the industry’s 4.7% growth. The S&P 500 Index has rallied 13.5% in the same time frame.Image Source: Zacks Investment ResearchQ4 EstimatesCurrently, the Zacks Consensus Estimate for revenues is pegged at $1.1 billion, indicating growth of 6.5% from the year-ago quarter’s reported figure. The consensus mark for earnings is pinned at 50 cents per share, which remained flat year over year.Last month, DXCM posted preliminary results for the fourth quarter. U.S. revenues reached approximately $803 million, representing a 4% rise year over year, while international revenues climbed 17% to around $310 million.Factors to NoteDexCom’s fourth-quarter 2024 outlook remains promising, with multiple tailwinds supporting potential growth. The expansion of the U.S. prescriber base, stabilization of the DME channel, strong international performance and the growing traction of Stelo are key factors driving optimism. Additionally, regulatory progress with the 15-day G7 CGM could provide a long-term boost. While challenges such as competitive pressures and channel mix shifts remain, DexCom appears well-positioned to accelerate growth and improve financial performance as it heads into 2025.U.S. Market Dynamics and Sales Force ExpansionDXCM’s quarterly performance is likely to have been shaped by its ongoing sales force expansion and efforts to stabilize its presence in the Durable Medical Equipment (“DME”) channel. In the third quarter, the company reported a record number of new patient starts, which signals improving commercial execution. The addition of 35,000 new clinicians since April is another strong indicator of potential growth. The increased base is expected to have contributed significantly in the soon-to-be-reported quarter.Furthermore, DXCM has implemented a more balanced channel strategy, ensuring DME providers receive a fair share of prescriptions, which could have supported revenue stabilization in the fourth quarter. While U.S. revenues declined 2% year over year in the third quarter, sequential improvement is anticipated as new patient starts convert into sustained sales.International Market Expansion and Reimbursement WinsDexCom’s international segment showed resilience, growing 12% year over year in the last reported quarter, driven by the expanded availability of G7 and Dexcom ONE+. It launched G7 in Australia and Dexcom ONE+ in France during the third quarter, which provided access to over 600,000 people with diabetes. The return to growth in Japan, where the new sales structure gained traction, was another key highlight.Given the momentum in these regions, the fourth quarter is likely to have witnessed strong international revenue growth. The company’s ability to expand reimbursement coverage, particularly for Type 2 basal insulin users, remains a critical driver that may further boost sales in the coming quarters.Stelo: A Game-Changer for the Non-Insulin MarketOne of DexCom’s most promising growth drivers for the fourth quarter is likely to have been Stelo, the over-the-counter continuous glucose monitor (CGM) targeted at people with prediabetes and Type 2 diabetes who are not on insulin. Since its launch in the third quarter, the product has generated significant inbound interest, and nearly 50% of customers have opted for the subscription model.Early customer feedback highlights positive experiences with ordering, delivery and app functionality, suggesting strong adoption potential. DexCom has also begun expanding Stelo’s distribution channels, including direct sales to clinicians and partnerships with DME providers, which should have accelerated its uptake in the fourth quarter. Additionally, the holiday season could have provided an added boost as CGM awareness grew among consumers interested in metabolic health.Financial Outlook and Margin ExpansionOn its third-quarter earnings call, DexCom reaffirmed its full-year 2024 revenue guidance of $4.00-$4.05 billion, representing organic growth of 11-13%. The company expects margin improvement in the fourth quarter as the impact of rebate headwinds moderates and operational efficiencies from the G7 transition materialize. Gross margin is projected to remain around 63%, with adjusted EBITDA of approximately 29%. Additionally, the company’s strong cash position of $2.5 billion provides financial flexibility to support strategic initiatives, including share repurchases and product development.What Our Quantitative Model SuggestsPer 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 -11.50%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.DexCom, Inc. Price and EPS Surprise DexCom, Inc. price-eps-surprise | DexCom, Inc. QuoteZacks Rank: The company currently carries a Zacks Rank #3 at present.Stocks Worth a LookHere 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.Natera NTRA has an Earnings ESP of +61.91% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.NTRA’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 36.37%. The Zacks Consensus Estimate for fourth-quarter EPS implies a rise of 34.4% from the year-ago reported figure.Masimo MASI has an Earnings ESP of +4.05% and a Zacks Rank #2 at present. The company is scheduled to release fourth-quarter 2024 results on Feb. 25. Its earnings surpassed estimates in each of the trailing four quarters, the average surprise being 17.10%. The Zacks Consensus Estimate for EPS implies an improvement of 14.4% from the year-ago reported figure.Maravai LifeSciences MRVI has an Earnings ESP of +10.00% and a Zacks Rank #3 at present. The company is expected to release fourth-quarter 2024 results in February.MRVI delivered a trailing four-quarter average earnings surprise of 116.67%. The Zacks Consensus Estimate for fourth-quarter EPS implies a decline of 400% from the year-ago reported figure.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Masimo Corporation (MASI): Free Stock Analysis Report DexCom, Inc. (DXCM): Free Stock Analysis Report Natera, Inc. (NTRA): Free Stock Analysis Report Maravai LifeSciences Holdings, Inc. (MRVI): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks