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

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DexCom, Inc. (NASDAQ: DXCM) stock surged over 14.7% on 14th Feb, 2020 (as of 10:42 am GMT-5; Source: Google finance) after the company posted better than expected results for the fourth quarter of FY 19. The company has reported Non-GAAP net income of $106.5 million for the fourth quarter of 2019, compared to a non-GAAP net income of $50.2 million for the same quarter of 2018. The fourth quarter 2019 non-GAAP amount excludes $11.7 million of non-cash interest expense related to Dexcom’s senior convertible notes, $1.3 million of business transition and related costs and $0.8 million of amortization of intangible assets. At the end of December, 2019, Dexcom held $1,533.3 million in cash and marketable securities and our revolving credit facility remains undrawn. The cash balance represents significant financial and strategic flexibility as Dexcom continues to expand production capacity and explore new market opportunities.

DXCM in the fourth quarter of FY 19 has reported the adjusted earnings per share of $1.15, beating the analysts’ estimates for the adjusted earnings per share of 74 cents. The company had reported the adjusted revenue growth of 37 percent to $462.8 million in the fourth quarter of FY 19, beating the analysts’ estimates for revenue of $442.38 million. This is due to volume growth, strong new patient additions as well as an increase in awareness of real-time CGM. The company posted the gross profit of $309.3 million or 66.8% of sales for the fourth quarter of 2019, compared to $222.8 million or 65.9% of sales in the fourth quarter of 2018. Non-GAAP operating income for the fourth quarter of 2019 was $103.6 million, compared to a non-GAAP operating income of $54.4 million for the fourth quarter of 2018. For full year revenue grew 43% compared to the prior year to $1,476.0 million, U.S. revenue posted growth of 42% and international revenue posted growth of 48%. The company in the fourth quarter commenced launch of G6 into Medicare & during the year doubled G6 sensor manufacturing capacity

For the full year 2020, the company has reaffirmed revenue outlook to be in the range of $1.725-1.775 billion, which is in line with the consensus view of $1.77 billion. The revenue outlook is on back of strong growth in sensor volumes, continued international expansion, shifting channel mix and overall market dynamics. The gross margin is still expected to be about 64% and the adjusted operating margin is expected to be about 13%. The adjusted EBITDA margin is expected to be about 23%.

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