Dexcom Stock, Down 15%, Is Haunted By Its 'Surprisingly Cautious' Outlook

 

Dexcom's (DXCM) solid third-quarter report was overshadowed Friday by its "surprisingly cautious" outlook. But analysts remained upbeat even as Dexcom stock tumbled.

During the calls with analysts, the diabetes devices maker said it expects the top end of their initial revenue guidance range to fall slightly below Wall Street's expectations, Leerink Partners analyst Mike Kratky said in a report. He sees 11% to 13% sales growth as being realistic.

But analysts had been expecting $4.64 billion in sales this year, which would represent a 15%-plus increase.

"While there is more than likely some extra conservatism being built into DXCM's initial guidance range alongside the ongoing CEO transition and a tumultuous recent stretch for the stock, we left the call with heightened uncertainty on the underlying stability of the CGM market," he said.

On the stock market today, Dexcom stock toppled 14.6%, closing at 58.22.

Dexcom Stock Faces Price-Target Cut

Kratky slashed his price target on Dexcom stock to 81 from 101, but kept his outperform rating.

He described the third-quarter report as "decent." Dexcom, which makes body-worn continuous glucose monitors for patients with diabetes, reported $1.21 billion in sales. Sales grew 22% — or 20% in constant current — to beat expectations for $1.18 billion, according to FactSet.

Earnings also came in above with Dexcom notching an adjusted 61 cents per share. Analysts called for 57 cents.

There are several moving parts behind Dexcom's guidance. The company is in the midst of a chief executive transition while also facing significant negative feedback from users on the reliability of the new G7 CGM, Kratky said. It's also competing with Abbott Laboratories (ABT) while working to launch a new sensor and a broader 15-day wear-time for the G7.

Further, the question of whether Medicaid will ultimately reimburse the cost of CGMs for non-insulin-using type 2 diabetics remains up in the air.

"This stock has remained an absolute battleground over the past few months, and we believe bulls were looking for a clean 3Q print to help provide much-needed stability for the stock," he said. "We expect that these preliminary comments on 2026 are likely to weigh on the stock on a near-term basis."
A Buying Opportunity?

William Blair analyst Brandon Vazquez called the Dexcom stock selloff a buying opportunity. He expects trends to improve and accelerate in 2026.

On the company's guidance, he says this was likely a "clear-the-deck moment to set a beatable bar for the new CEO."

"Plus, initial 2026 comments do not include any benefits from expanded market access from type 2 patients," he said in a report. "We remind investors DexCom is still near record levels of new patient adds (+20% in the third quarter) and next year will be the smallest level of pricing headwinds in years, meaning it should see sales growth close the gap to 20%."

Vazquez kept his outperform rating on Dexcom stock.

https://www.investors.com/news/technology/dexcom-stock-dexcom-earnings-q3-2025/