Dexcom (Nasdaq:DXCM) shares took a hit after hours today on first-quarter results that came in ahead of the consensus forecast on Wall Street.
Shares of DXCM dipped about 7% to $128.40 apiece after the market closed today. MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — closed the day down 1%.
The San Diego-based continuous glucose monitor maker reported profits of $146.4 million. That equals 36¢ per share on sales of $921 million for the quarter ended March 31, 2024. Dexcom more than tripled its bottom line on a sales uptick of 24.2%.
Adjusted to exclude one-time items, earnings per share came in at 32¢. That landed 5¢ ahead of expectations on Wall Street. Sales also topped the forecast as experts estimated $909.2 million in revenue.
Dexcom attributed its growth to strong new customer additions as the awareness of real-time CGM increases.
Highlights for the quarter included FDA clearance for the over-the-counter Stelo CGM for non-insulin users. The FDA also cleared a direct-to-watch feature for the G7 CGM and the company launched its Dexcom One+ offering in eight European countries.
“Dexcom is off to a great start in 2024, delivering another quarter of strong financial results while advancing several key strategic initiatives,” said Kevin Sayer, Dexcom’s chairman, president and CEO. “This is shaping up to be another exciting year for Dexcom as we launch new product innovations and work to improve access to Dexcom CGM around the world.”
The company updated its revenue guidance, increasing the low end from a previous projection of $4.15 billion. It now expects sales betwen $4.2 billion and $4.35 billion, marking 17%-21% growth.
The analysts’ view on Dexcom
BTIG analysts Marie Thibault and Sam Eiber labeled the market reaction to Dexcom’s earnings over the top. They note that expectations set a high bar that Dexcom failed to quite reach.
“We felt the bar was relatively high for the Q1 print,” the analysts wrote. “We understand the great expectations but also think the stock reaction in the aftermarket, with shares slumping ~6%, is too harsh for a company that consistently beats and raises on both sales and EPS and has several growth opportunities ahead.”
The analysts also say that Dexcom expanded its salesforce in the first quarter to extend its reach, especially with Stelo on the horizon. They also noted good operational expense control.
“We continue to see several growth drivers, including continued adoption among the core insulin-intensive population, on-track penetration of the basal-only population, opportunities for greater uptake in Europe, Stelo debut, and eventually, a ramp in Japan.”
