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DexCom (DXCM) to Report Q4 Earnings: What's in the Cards?

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DexCom, Inc. DXCM is scheduled to release fourth-quarter 2020 results on Feb 11, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 46.9%. Further, it beat estimates in each of the trailing four quarters, the average surprise being 148.8%.

Q4 Estimates

Currently, the Zacks Consensus Estimate for fourth-quarter revenues is pegged at $547.7 million, suggesting growth of 18.3% from the year-ago reported figure. The consensus estimate for earnings stands at 91 cents per share, indicating a decline of 20.9% from the prior-year quarter.

Factors to Note

DexCom’s fourth-quarter top line is likely to reflect increase in volumes, courtesy of new patients across all channels, and rising global awareness regarding the benefits of its real-time Continuous Glucose Monitoring (CGM).

In fact, per the preliminary announcement, DexCom — the leader in CGM — anticipates fourth-quarter 2020 revenues to meet or exceed $567 million (up 23% from the year-ago quarter).

DexCom, Inc. Price and EPS Surprise

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

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

In September 2020, the company announced the first-ever registry committed toward keeping a track of the outcomes of patients and healthcare professionals utilizing Continuous Glucose Monitoring (CGM) in hospitals to combat the COVID-19 pandemic.

Further, DexCom launched the Patient Assistance Program to help current U.S. customers who have lost their health insurance coverage as a result of the pandemic.

Per third-quarter 2020 earnings call, the company inked a government wide contract for the sale of DexCom CGM via eligible government buyers, including the VA. With the help of this contract, eligible veterans will have an easier and more convenient pharmacy access.

With respect to company’s intensive business, DexCom announced its co-marketing efforts of G6 CGM with Eli Lilly's new ultra-rapid-acting insulin. This collaboration highlights DexCom’s robust partnership with the team at Eli Lilly and is likely to provide a boost to the company’s efforts to expand awareness of Dexcom CGM among practicing clinicians, which include primary care physicians.

These developments are anticipated to have positively impacted the company’s performance in the to-be-reported quarter.

DexCom has significant opportunity to capitalize on international markets backed by demographic trends and lifestyle in countries outside the United States and Europe. Per the company, international growth remains strong and presents lucrative prospects driven by improving global access and awareness. This, in turn, might get reflected in the fourth-quarter international revenues.

Per the preliminary announcement, international revenues are anticipated to be around $116 million (up 33% from the year-ago quarter).

Improved operational discipline might have favored the fourth-quarter operating margin.

However, increase in operating expenses and intense competition may have weighed on the to-be-reported quarter’s performance.

What Our Quantitative Model Suggests

Per our proven model, a 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. This is the case here as you will see.

Earnings ESP: DexCom has an Earnings ESP of +8.90%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #3.

Other Stocks Worth a Look

Here are some other medical stocks worth considering as these too have the right combination of elements to post an earnings beat this quarter.

DENTSPLY SIRONA XRAY has an Earnings ESP of +4.45% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Option Care Health, Inc. OPCH has an Earnings ESP of +34.69% and a Zacks Rank of 2.

Radius Health, Inc. RDUS has an Earnings ESP of +10.54% and a Zacks Rank of 2.

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