DexCom Stock Faces Challenges Amid Revenue Growth and Market Volatility

San Diego, California-based DexCom, Inc. (DXCM) is a prominent medical device company specializing in the design, development, and commercialization of continuous glucose monitoring (CGM) systems. With a market capitalization of $27.6 billion, DexCom operates across the Americas, Europe, and other international markets.

As a large-cap stock, identified as those with valuations of $10 billion or more, DexCom has established a strong presence in the niche diabetes management sector. Its extensive customer base and expertise in metabolic health make its valuation within the large-cap range expected. The company primarily supplies systems aiding diabetes management for patients, caregivers, and healthcare professionals.

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Nonetheless, DexCom has encountered significant challenges, as its stock has declined 50.5% from its peak of $142 on March 26, 2024. In addition, DXCM stock has dropped 12.7% over the past three months, noticeably underperforming the Dow Jones Industrial Average ($DOWI), which fell by 6.2% during the same period.

Considering the longer-term outlook, DexCom’s performance appears even more alarming. DXCM stock has plummeted 47.2% over the past 52 weeks, starkly contrasting with the DOWI’s gains of 6.9% in the same timeframe.

To underscore the bearish trend, DXCM has remained predominantly below its 200-day moving average since mid-June 2024, experiencing fluctuations while dipping notably beneath its 50-day moving average in March 2025.

In its recent performance, DexCom reported Q4 results on February 13, which revealed that despite missing analysts’ earnings expectations, DXCM stock surged 5.9% during the trading session. The company achieved a 7.6% year-over-year revenue increase, exceeding $1.1 billion, fueled by solid organic growth. However, rising cost of goods sold (COGS) and selling, general and administrative (SG&A) expenses resulted in considerable margin contraction. Specifically, the adjusted gross margin declined by 480 basis points from the year-ago quarter to 59.4%, while the adjusted operating margin fell by 470 basis points to 18.8%. Consequently, non-GAAP net income decreased by 12.3% year-over-year to $179 million.

On a positive note, DexCom has maintained its fiscal 2025 revenue growth guidance at 14%. Additionally, guidance for adjusted gross margins of 64% to 65% and adjusted operating margins of 21% may restore some investor confidence.

However, it is worth noting that DexCom has notably underperformed compared to its peer STERIS plc (STE), which experienced only a 2.5% decline in stock prices over the past year.

Despite its struggles, analysts maintain a positive outlook for DXCM. A consensus of 22 analysts indicates a “Strong Buy” rating, with a mean price target of $103.23, suggesting a potential upside of 46.9% from current price levels.

On the date of publication, Aditya Sarawgi did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is provided solely for informative purposes. For further details, please view the Barchart Disclosure Policy here.

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