What Happened?
Shares of medical device company DexCom (NASDAQ: DXCM) fell 2.6% in the morning session after analysts at Piper Sandler and Bernstein lowered their price targets on the stock, citing concerns over the company's growth prospects and valuation.
The move came as Jake Leach officially took on the role of President and CEO. Piper Sandler reduced its price target to $75 from $100, expressing worries over a potential slowdown in growth as suggested by the company's year-end guidance. Similarly, Bernstein cut its price target to $84 from $98 because of valuation concerns. Despite the target reductions, both firms kept their positive ratings on the stock. Not all analyst sentiment was negative, however, as Leerink Partners raised its price target for DexCom to $92 from $81, pointing to improved data for the company's G7 device.
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What Is The Market Telling Us
DexCom’s shares are quite volatile and have had 15 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 2 months ago when the stock dropped 14.8% on the news that the company reported underwhelming earnings. The company's revenue grew over 21% year-on-year to $1.21 billion, and its adjusted earnings per share of $0.61 also came in ahead of consensus estimates. DexCom lifted its full-year 2025 revenue forecast to approximately $4.64 billion. Despite these positive metrics, the stock's decline suggests investors were anticipating an even more robust performance and a more substantial guidance increase. The market's negative reaction indicates that the strong quarter was not enough to meet the high expectations priced into the stock, prompting a sell-off.
DexCom is up 1.8% since the beginning of the year, but at $67.75 per share, it is still trading 25.3% below its 52-week high of $90.75 from February 2025. Investors who bought $1,000 worth of DexCom’s shares 5 years ago would now be looking at an investment worth $698.32.
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