Dexcom’s Strong Market Position and Growth Potential Justify Buy Rating Despite Margin Challenges

Analyst Mike Kratky from Leerink Partners reiterated a Buy rating on Dexcom (DXCM – Research Report) and increased the price target to $101.00 from $95.00.

Mike Kratky has given his Buy rating due to a combination of factors that highlight Dexcom’s strong market position and growth potential. The company reported impressive first-quarter sales, surpassing consensus estimates, largely driven by a significant increase in new customer starts in the U.S. market. This growth was particularly notable among non-insulin dependent Type 2 diabetes patients, who gained access to Dexcom’s products due to expanded coverage agreements.
Despite some challenges, such as increased inventory replenishment costs impacting gross margins, Dexcom’s management remains optimistic about offsetting these costs through operational efficiencies. The company’s unchanged full-year sales guidance is viewed as conservative, given the multiple growth drivers, including increased coverage for Type 2 patients, recovery in durable medical equipment share, and the anticipated uptake of the G7 sensor. These factors, combined with a favorable catalyst path, support the potential for further upside in Dexcom’s stock, justifying the Buy rating.

DXCM’s price has also changed slightly for the past six months – from $70.350 to $70.260, which is a -0.13% drop .