DexCom, Inc.(NASDAQ: DXCM) stock lost over 10.04% on January 4th, 2017 (Source: Google finance) on competition concerns from Abbott. Abbott’s FreeStyle Libre continuous glucose monitor got the Medicare coverage, yesterday. The stock lost over 2.9% in 2017 year.
On the other side, DexCom has been a leading player in continuous glucose monitoring (CGM) for people with diabetes. The group made a development agreement with Eli Lilly to include Dexcom CGM into Lilly’s Connected Diabetes Ecosystem. DexCom forecasts to combine Lilly’s smart insulin delivery devices and Dexcom CGM to advance the future of diabetes management.
For the third quarter of 2017, the group delivered better than expected performance, with revenue rising 24% to $184.6 million on a yoy basis while International revenue surged 83% against the third quarter of 2016. The group saw rising sales volume of their disposable sensors on the back of the ongoing growth of their installed base of customers using their G4 PLATINUM and G5 Mobile systems, and durable systems to both new and current customers. As a result, the stock rose over 8.6% in the last three months (As of Jan 4th, 2017; Source: Google finance).
The group continued to focus on their core value proposition of DexCom’s real-time CGM to people with diabetes around the world. Despite competition from Abbott, they are well positioned to leverage their target market opportunity given their several major initiatives, including the rollout of therapeutic CGM to the Medicare population and continued international expansion. They made distribution arrangements with Byram and affiliates and Edgepark and affiliates , who generated over 14% and 12% respectively, of their total revenue during the nine months ended September 30, 2017 .
The group had $525.8 million in cash, cash equivalents and short-term marketable securities, as of September 30th, 2017. Schwab Charles Investment Management enhanced their holdings in the group by 3.2% in the third quarter, based on the recent filing.
DexCom stock has a target price of $63.38, which is 21.3% upside (Source: tipranks.com)