On Feb 28, 2013, we retained
) at Neutral after the company beat Zacks Consensus Estimates for
earnings and revenue for fourth quarter 2012.
Why the Retention?
DexCom released its results for the fourth quarter on Feb 21.
The company posted adjusted loss per share of 14 cents per share,
better than the Zacks Consensus Estimate of a loss of 16 cents a
share. Revenues in the reported quarter surged 48.7% year over
year to $33.3 million, beating the Zacks Consensus Estimate of
Over the past 30 days, the Zacks Consensus Estimate for 2013
has moved down by 6 cents to (54) cents and for 2014 it has
dropped by 4 cents to (20) cents during the same timeframe.
DexCom is well placed in the industry that it serves. Given
the burgeoning diabetes population in the U.S., its G4 Platinum
presents considerable market opportunity. Successful
commercialization of G4 Platinum in the U.S. could just be the
catalyst that the company needs to gain share in the market it
Increased awareness and acceptance of the need for continuous
glucose monitoring and international expansion should help drive
sales of DexCom's products. The company is eyeing prospects in
the vast markets of India, China and Japan.
In addition to upgrading and enhancing the functions of
existing products, DexCom has also been active on the
collaboration front, through which it is looking to leverage its
technology with its collaborator's product offerings.
We believe that the company's move to buy healthcare IT
company SweetSpot Diabetes Care, may allow it to compete more
effectively through better data management systems.
Despite increasing revenues, DexCom remains a loss-making
entity and its efforts are made more difficult by a stringent
regulatory environment. Competition in the glucose monitoring
market is fierce. DexCom currently holds a Zacks Rank #3
Other Stocks to Consider
) carry a Zacks Rank #1 (Strong Buy) and Zacks Rank #2 (Buy),
respectively, and are expected to do well. In addition,
Sirona Dental Systems Inc.
) retains a Zacks Rank #2 (Buy) and warrants a look.
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