U.S. Markets closed
  • S&P 500

    3,269.96
    -40.15 (-1.21%)
     
  • Dow 30

    26,501.60
    -157.51 (-0.59%)
     
  • Nasdaq

    10,911.59
    -274.00 (-2.45%)
     
  • Russell 2000

    1,538.48
    -23.10 (-1.48%)
     
  • Crude Oil

    35.72
    -0.45 (-1.24%)
     
  • Gold

    1,878.80
    +10.80 (+0.58%)
     
  • Silver

    23.72
    +0.35 (+1.52%)
     
  • EUR/USD

    1.1650
    -0.0029 (-0.2446%)
     
  • 10-Yr Bond

    0.8600
    +0.0250 (+2.99%)
     
  • Vix

    38.02
    +0.43 (+1.14%)
     
  • GBP/USD

    1.2951
    +0.0028 (+0.2163%)
     
  • USD/JPY

    104.6200
    +0.0100 (+0.0096%)
     
  • BTC-USD

    13,744.58
    +129.97 (+0.95%)
     
  • CMC Crypto 200

    265.42
    +1.78 (+0.68%)
     
  • FTSE 100

    5,577.27
    -4.48 (-0.08%)
     
  • Nikkei 225

    22,977.13
    -354.81 (-1.52%)
     

DexCom (DXCM) Q1 Earnings and Revenues Surpass Estimates

Zacks Equity Research
·4 mins read

DexCom, Inc. DXCM reported adjusted earnings of 44 cents per share in first-quarter 2020, which comfortably surpassed the Zacks Consensus Estimate of 10 cents. Notably, the company has reported a loss per share of 5 cents in the prior-year quarter.

Total revenues surged 44.4% to $405.1 million on a year-over-year basis and also beat the Zacks Consensus Estimate by 14%. Rising volumes across all channels, strong new patient additions and increasing global awareness of the benefits of real-time Continuous Glucose Monitoring (CGM) contributed to the upside.

Segmental Details

Revenues at the Sensor and other revenue segment (80% of total revenues) surged 53.4% on a year-over-year basis to $325 million. Hardware revenues (20%) improved 16.8% year over year to $80.1 million.

Geographical Details

U.S. revenues (81% of total revenues) increased 38.9% on a year-over-year basis to $292.3 million. International revenues (19%) surged 61.1% year over year to $112.8 million.

DexCom, Inc. Price, Consensus and EPS Surprise

 

DexCom, Inc. Price, Consensus and EPS Surprise
DexCom, Inc. Price, Consensus and EPS Surprise

DexCom, Inc. price-consensus-eps-surprise-chart | DexCom, Inc. Quote

Margin Analysis

Gross profit in the quarter under review totaled $256.5 million, up 51.9% year over year. However, DexCom generated gross margin (as a percentage of revenues) of 63.3%, which expanded 310 bps year over year.

Research and development expenses amounted to $73.1 million in the quarter, up 23.9% year over year. Selling, general and administrative expenses totaled $149.8 million in the reported quarter, up 20.6% year over year.

The company reported total operating expenses of $222.9 million, up 21.7% year over year.

The company reported operating income of $33.6 million, against the year-ago quarter’s operating loss of $14.4 million.

Financial Position

The company exited the first quarter with $584.6 million in cash and cash equivalents, which surged 31% from year-end 2019.

2020 Guidance

The company has decided to suspend full-year 2020 guidance (issued previously on Feb 13, 2020) on account of the uncertainty with respect to the duration and impact of the COVID-19 pandemic.

Wrapping Up

DexCom exited the first quarter on a strong note, wherein both earnings and revenues beat the Zacks Consensus Estimate. Impressive contributions from the segments were key catalysts. Expansion in gross margin is a positive.

Additionally, the glucose monitoring market presents significant commercial opportunity for this company. DexCom’s opportunities in alternative markets such as the non-intensive diabetes management space, the hospital, gestational, pre-diabetes and obesity are likely to provide it a competitive edge in the MedTech space.

However, due to the uncertainty surrounding the COVID-19 pandemic, the company has suspended full-year 2020 guidance. Meanwhile, cut-throat competition in the market for blood & glucose monitoring devices remains a concern.

Zacks Rank

Currently, DexCom carries a Zacks Rank of 3 (Hold).

Key Picks

Some better-ranked stocks in the broader medical space are Exact Sciences Corporation EXAS, ViewRay, Inc. VRAY and ResMed Inc. RMD, each carrying a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Exact Sciences’s first-quarter 2020 revenues is pegged at $350.2 million, suggesting a whopping year-over-year improvement of 116.1%. The same for EPS stands at a loss of 60 cents, indicating growth of 9.1% from the prior-year quarter.

The Zacks Consensus Estimate for ViewRay’s first-quarter 2020 earnings per share stands at a loss of 20 cents, suggesting an improvement of 41.8% from the year-ago period.

The Zacks Consensus Estimate for ResMed’s third-quarter fiscal 2020 revenues is pegged at $715.6 million, suggesting year-over-year improvement of 8.1%. The same for EPS stands at $1.00, indicating growth of 12.4% from the year-ago reported figure.

Zacks Top 10 Stocks for 2020

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?

Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.

Access Zacks Top 10 Stocks for 2020 today >>


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
 
DexCom, Inc. (DXCM) : Free Stock Analysis Report
 
ResMed Inc. (RMD) : Free Stock Analysis Report
 
Exact Sciences Corporation (EXAS) : Free Stock Analysis Report
 
ViewRay, Inc. (VRAY) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research