San Diego, CA-based DexCom, Inc. DXCM, a renowned medical device company, reported that it expects preliminary, unaudited revenue of approximately $168 million for the fourth quarter ended Dec 31, 2016. This reflects an increase of 28% over the fourth quarter of 2015. For fiscal 2016, total preliminary, unaudited revenue is expected to be $570 million, implying an estimated increase of 42% over 2015.
However, for the last six months, the company posted a negative return of almost 16%, wider than the Zacks categorized Medical Instruments sub-industry’s decline of roughly 6.1%. However, DexCom witnessed an increase of roughly 6.6% to close at $67.04 yesterday, breaking the dismal market trend.
Meanwhile, the estimate revision trend has been unfavorable as 12 estimates moved south over the past two months with no movement in the opposite direction. In fact, the current year estimates for the stock decreased by a penny to a loss of 77 cents per share as another estimate moved down last month.
Coming back to the news, the upside expected in revenues was due to an estimated 80,000 to 90,000 new patients adopting DexCom Continuous Glucose Monitoring (CGM) worldwide. The company ended the year with approximately 200,000 patients globally, up from approximately 140,000 at the end of 2015.
On the brighter side, DexCom’s long-term fundamentals are compelling. The company recorded a three-year CAGR of 59% for revenues, a strong positive in our view. Meanwhile, a long-term expected earnings growth of 32.5% instills confidence in investors.
DexCom develops and markets continuous glucose monitoring systems for ambulatory use by people with diabetes and by healthcare providers.
Zacks Rank & Key Picks
Currently, DexCom has a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader medical sector include Glaukos Corporation GKOS, Dextera Surgical Inc. DXTR and Penumbra Inc. PEN. Notably, Glaukos Corporation and Penumbra sport a Zacks Rank #1 (Strong Buy) while Dextera carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Glaukos Corporation has a long-term expected earnings growth rate of approximately 25%. Notably, the stock represents an impressive one-year return of 52.1%.
Dextera Surgical has posted a positive earnings surprise of 8.3% in the last reported quarter. Additionally, a long-term expected earnings growth rate of 25% raises investor confidence.
Penumbra has a long-term expected earnings growth rate of 20%. Notably, the stock represents an impressive one-year return of almost 29.7%.
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DexCom, Inc. (DXCM): Free Stock Analysis Report
Penumbra, Inc. (PEN): Free Stock Analysis Report
Glaukos Corporation (GKOS): Free Stock Analysis Report
Dextera Surgical Inc. (DXTR): Free Stock Analysis Report
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