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

Zacks Equity Research
·3 min read

DexCom (DXCM) closed the most recent trading day at $355.02, moving -0.27% from the previous trading session. This move lagged the S&P 500's daily gain of 0.35%. At the same time, the Dow added 0.23%, and the tech-heavy Nasdaq gained 0.26%.

Heading into today, shares of the medical device company had gained 13.9% over the past month, outpacing the Medical sector's gain of 5.16% and the S&P 500's gain of 3.27% in that time.

Wall Street will be looking for positivity from DXCM as it approaches its next earnings report date. In that report, analysts expect DXCM to post earnings of $0.92 per share. This would mark 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.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.07 per share and revenue of $1.91 billion. These totals would mark changes of +66.85% and +29.13%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for DXCM. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.15% lower. DXCM is currently a Zacks Rank #3 (Hold).

Digging into valuation, DXCM currently has a Forward P/E ratio of 116.06. For comparison, its industry has an average Forward P/E of 60.33, which means DXCM is trading at a premium to the group.

Investors should also note that DXCM has a PEG ratio of 2.95 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Medical - Instruments was holding an average PEG ratio of 3.91 at yesterday's closing price.

The Medical - Instruments industry is part of the Medical sector. This group has a Zacks Industry Rank of 167, putting 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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