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DexCom (DXCM) Gains As Market Dips: What You Should Know

Zacks Equity Research
·3 min read

DexCom (DXCM) closed at $358.57 in the latest trading session, marking a +0.18% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.35%. At the same time, the Dow lost 0.41%, and the tech-heavy Nasdaq lost 0.07%.

Heading into today, shares of the medical device company had gained 8.25% over the past month, outpacing the Medical sector's gain of 4.43% and the S&P 500's gain of 3.21% in that time.

Wall Street will be looking for positivity from DXCM as it approaches its next earnings report date. On that day, DXCM is projected to report earnings of $0.92 per share, which would represent a year-over-year decline of 20%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $546.70 million, up 18.13% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.07 per share and revenue of $1.91 billion, which would represent changes of +66.85% and +29.13%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for DXCM. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.15% lower. DXCM currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that DXCM has a Forward P/E ratio of 116.69 right now. This valuation marks a premium compared to its industry's average Forward P/E of 57.07.

We can also see that DXCM currently has a PEG ratio of 2.97. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Medical - Instruments industry currently had an average PEG ratio of 3.94 as of yesterday's close.

The Medical - Instruments industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 166, which puts it in the bottom 35% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow DXCM in the coming trading sessions, be sure to utilize Zacks.com.

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