Dexcom’s Strong Q1 Performance and Strategic Initiatives Drive Buy Rating

TD Cowen analyst Josh Jennings maintained a Buy rating on Dexcom (DXCM – Research Report) yesterday and set a price target of $100.00.

Josh Jennings has given his Buy rating due to a combination of factors, including Dexcom’s strong financial performance in the first quarter. The company reported worldwide revenue of $1.04 billion, surpassing expectations with a 12% reported growth and 14% organic growth. This was driven by robust US sales, which exceeded forecasts, indicating a solid domestic market presence.
Furthermore, Dexcom is expanding its market reach with significant new type 2 diabetes coverage, as two of the three largest US pharmacy benefit managers now cover their products, with the third expected to follow suit soon. The company’s strategic initiatives, such as the launch of the 15-day sensor in the US and the expansion of Stelo’s distribution through Amazon, are poised to drive future growth. Despite a slight gross margin shortfall due to seasonal factors and supply chain challenges, the company’s financial health remains strong, supported by a substantial cash reserve and a new share repurchase program.

In another report released on April 28, Wells Fargo also maintained a Buy rating on the stock with a $98.00 price target.