DexCom (DXCM) Stock Forecast & Price Target

DexCom's Q3 international revenue exhibited a robust growth trajectory, climbing 22% year-over-year, driven by significant expansions in markets such as France and Canada. The company's domestic business also showed strong performance, achieving approximately $852 million in revenue, representing a 21% increase, largely attributed to successful penetration of the Type 2 diabetes (T2D) patient population. With the raised full-year sales guidance to an anticipated range of $4.630B to $4.650B and ongoing innovations in continuous glucose monitoring technology, DexCom is positioned for sustained growth and potential margin improvements, supporting a favorable outlook for the company's financial performance.

DexCom is lowering its profitability outlook for the current year, with adjusted EBIT and EBITDA projections down 50 basis points to 20%-21% and 29%-30%, respectively, indicating potential challenges ahead. The company did not achieve record new patient growth in the third quarter, raising concerns that quality issues are affecting business performance and may worsen as competition increases and new integrative technologies, like those from Libre, emerge. Moreover, with projected gross margins decreasing to 61% due to scrap issues and compounded risks, including intensified market competition and pricing pressure, DexCom faces a challenging financial landscape moving forward.