Why DexCom, Inc. (NASDAQ: DXCM) stock is going gangbusters today

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DexCom, Inc. (NASDAQ: DXCM) stock surged over 8.7% on 29th April, 2020 (As of 12:08 pm GMT-4; Source: Google finance) after the company posted better than expected results for the first quarter of FY 20. The company has reported the Non-GAAP net income of $41.4 million for the first quarter of 2020, compared to a non-GAAP net loss of $4.6 million for the same quarter of 2019. At the end of March, 2020, Dexcom held $1.5 billion in cash and marketable securities and the revolving credit facility remains undrawn. The cash balance represents significant financial and strategic flexibility as Dexcom is expanding the production capacity and exploring new market opportunities. Meanwhile, the company has temporarily suspended its 2020 guidance, which was previously issued on February 13, 2020, due to uncertainties related to the duration and scope of the COVID-19 pandemic.

DXCM in the first quarter of FY 20 has reported the adjusted earnings per share of 44 cents, beating the analysts’ estimates for the adjusted earnings per share of 10 cents, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 44 percent to $405.10 million in the first quarter of FY 20, beating the analysts’ estimates for revenue by 14.01%. Volume growth along with strong new patient additions was the primary driver of revenue growth as awareness of real-time CGM increases. The company posted the Non-GAAP gross profit of total $258.7 million or 63.9% of sales for the first quarter of 2020, compared to $168.8 million or 60.2% of sales in the first quarter of 2019.

Moreover, during the first quarter, U.S. revenue growth was of 39% and international revenue grew 61%. The company during the period had obtained the CE Mark for the usage of the Dexcom G6 CGM system during pregnancy. The company during the period had also received regulatory approvals for Dexcom G6 in Australia, Japan, and South Korea.

After the close of the first quarter, the company had taken initiatives in response to the COVID-19 pandemic. Dexcom is making its CGM systems available for use in hospital settings and other healthcare facilities to support COVID-19 healthcare related efforts during the current pandemic. The remote monitoring with Dexcom CGM systems helps to reduce the healthcare provider exposure and preserve personal protective equipment. Dexcom has intended to donate up to 10,000 display devices. The company will give new patient assistance program to help current U.S. customers who have lost insurance due to the COVID-19 pandemic.

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