Dexcom (Nasdaq:DXCM) (Nasdaq:DXCM) shares plummeted today on second-quarter results that came in mixed compared to the consensus forecast.
Shares of DXCM fell more than 40% to $63.96 apiece in morning trading today. MassDevice‘s MedTech 100 Index was down slightly.
The San Diego-based continuous glucose monitor (CGM) maker yesterday evening reported profits of $143.5 million. That equals 36¢ per share on sales of $1.004 billion for the quarter ended June 30, 2024.
Dexcom recorded a 23.8% bottom-line gain on a sales increase of 15.3%.
Adjusted to exclude one-time items, earnings per share came in at 43¢. That landed 4¢ ahead of expectations on Wall Street. Sales fell $33 million short of revenues expected by the experts, though.
In reporting its second-quarter results, Dexcom also announced a $750 million share repurchase program.
Recent highlights for the quarter include launching a direct-to-watch feature for the G7 CGM and new automated insulin delivery integrations. Kevin Sayer, Dexcom’s chair, president and CEO, told Drug Delivery Business News about some of Dexcom’s plans last month.
“While Dexcom advanced several key strategic initiatives in the second quarter, our execution did not meet our high standards,” said Sayer. “We have a unique opportunity to serve millions of more customers around the world with our differentiated product portfolio and we are taking action to improve our execution and best position ourselves for continued long-term growth.”
Dexcom lowered its 2024 sales guidance from between $4.2 billion and $4.35 billion to between $4 billion and $4.05 billion. The company forecasts growth between 11% and 13%.
The analysts’ view
BTIG’s Marie Thibault and Sam Eiber highlighted three factors driving the Dexcom misses and guidance cut. The company cited lower new patient adds due to a salesforce reorganization, faster broad patient eligibility for G7 rebates combined with lower new starts and lower share in the durable medical equipment (DME) channel.
“This Q2 report was certainly a shock but at this early stage we do not think the issues are structural or irreparable,” the analysts wrote. “Ramps take time and we expect new sales reps can gain their footing by late this year into early 2025. The rebate headwind is expected to peak in Q3. We expect greater attention to relationships in the DME channel can start to reverse the share loss over the next few quarters.”
Management took responsibility for the execution issues, as Sayer outlined. The analysts feel that the CGM market potential remains unchanged and no new dynamic emerged, despite the Dexcom results.
“We think DXCM does still deserve a premium to these peers, since it is more profitable than most, retains a strong position in a market duopoly, and has a path back to higher growth,” they said.
