Is a Beat Likely for DexCom (DXCM) This Earnings Season?

DexCom, Inc. DXCM is scheduled to release third-quarter 2022 results on Oct 27, after the closing bell. In the last reported quarter, the company’s earnings met the Zacks Consensus Estimate. Its earnings missed the Zacks Consensus Estimate in two of the trailing four quarters, beat once and met the same once, the average negative surprise being 3.35%.

Q3 Estimates

Currently, the Zacks Consensus Estimate for third-quarter revenues is pegged at $752.67 million, suggesting growth of 15.8% from the year-ago reported figure. The consensus mark for earnings stands at 24 cents per share, indicating an improvement of 9.1% from the prior-year quarter.

Factors to Note

DexCom’s third-quarter top line is likely to have been aided by an increase in volume, courtesy of new patients across all channels and rising global awareness regarding the benefits of its real-time Continuous Glucose Monitoring (“CGM”). Potential robust contributions from the Sensor segment and domestic and international revenue growth are likely to be the key catalysts for third-quarter results.

During the first half of 2022, the company continued making progress with respect to its objective of expanding access and accelerating its leadership in CGM-connected solutions and customer choice. DexCom launched the Dexcom ONE product in the United Kingdom and Spain during the second quarter. These developments are likely to have benefited customer growth during the soon-to-be-reported quarter.

In March 2022, the company received the FDA’s Breakthrough Device Designation for the Dexcom CGM system’s use in the hospital setting. During the first quarter, DexCom secured the CE mark for the Dexcom G7 CGM System for monitoring people with diabetes aged two years and older and also initiated a limited launch of the system in Europe. DexCom expanded coverage for Dexcom CGM to include type 1 diabetes in Ontario, Canada during the first quarter. Moreover, TRICARE added Dexcom G6 as a brand-name formulary pharmacy benefit.

These developments may have favored the company’s performance in the to-be-reported quarter.

DexCom, Inc. Price and Consensus

DexCom, Inc. Price and Consensus

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

DexCom has been benefiting from demographic trends and lifestyles in countries outside the United States and Europe . Per the company, international growth remains strong and presents lucrative opportunities, courtesy of improving global access and awareness.

In second-quarter 2022, international revenues (27% of total revenues) surged 39% year over year to $185.2 million. The momentum is likely to have continued in the third quarter, thanks to broad-based growth. The Zacks Consensus Estimate for U.S. and International revenues is pegged at $552 million and $197 million, respectively, for the third quarter.

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

Earnings Beat Likely

Our proven model predicts an earnings beat for DexCom this time around. The combination of a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate (26 cents per share) and the Zacks Consensus Estimate (24 cents per share), is +7.00%.

Zacks Rank: DexCom sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks Worth a Look

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

Baxter International BAX has an Earnings ESP of +1.31% and a Zacks Rank of 3.

Baxter’s stock has declined 27.5% so far this year. BAX missed earnings estimates in the last reported quarter. Baxter has a four-quarter earnings surprise of 6.15%, on average.

McKesson MCK has an Earnings ESP of +0.27% and a Zacks Rank of 2.

McKesson’s stock has gained 41.9% so far this year. MCK beat earnings estimates in the last reported quarter. McKesson has a four-quarter earnings surprise of 13.00%, on average.

AmerisourceBergen ABC has an Earnings ESP of +0.61% and a Zacks Rank of 3.

AmerisourceBergen’s stock has gained 5.8% so far this year. ABC topped earnings estimates in the last reported quarter. AmerisourceBergen has a four-quarter earnings surprise of 2.63%, on average.

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