Dexcom Stock Crashes 39% After Slashing Its Guidance On A 'Painfully Self-Inflicted' Quarter

Dexcom (DXCM) banal plummeted aboriginal Friday aft the diabetes devices shaper reported lighter-than-expected June-quarter income and slashed its outlook for the year.

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Sales climbed 15% twelvemonth implicit twelvemonth to conscionable northbound of $1 billion. But that missed expectations for $1.04 billion, according to FactSet. Adjusted net came successful astatine 43 cents per share, beating projections by 4 pennies and up 26.5% vs. the aforesaid 3 months past year.

"However, the bigger astonishment was that absorption decreased guidance by $200 cardinal to $300 cardinal for the afloat year," William Blair expert Margaret Kaczor Andrew said successful a report. "This alteration we judge has led investors to question the longer-term maturation illustration for Dexcom."

Chief Executive Kevin Sayer acknowledged that second-quarter metrics didn't "meet our precocious standards."

The institution is good known for its continuous glucose monitors, oregon CGMs. These body-worn devices way glucose levels successful real-time for patients with diabetes. Dexcom banal has traded sideways this year, contempt expectations for the institution to motorboat a caller show this year.

"We person a unsocial accidental to service millions of much customers astir the satellite with our differentiated merchandise portfolio and we are taking enactment to amended our execution and champion presumption ourselves for continued semipermanent growth," helium said successful a statement.

But successful aboriginal enactment connected today's banal market, Dexcom banal crashed 39.3% to 65.510. That enactment shares astatine their lowest constituent since April 2020.

Dexcom Stock Slammed On Guidance Cut

Andrew said planetary income came successful $27 cardinal beneath expectations.

The institution cited lower-than-expected caller diligent starts of 70,000 globally — astir 20% to 25% beneath Andrew's forecast. Dexcom besides noted its mislaid stock successful the durable aesculapian instrumentality channel, which comes astatine a terms premium. Further, antecedently noted pharmacy rebates for the caller G7 CGM are kicking successful faster than expected.

As a result, Dexcom lowered its outlook for the year. The institution present expects income to summation 11% to 13% to $4 cardinal to $4.05 billion. That lagged Dexcom banal analysts' forecast for $4.3 billion.

"Despite the little revenue, it is notable that the institution reiterated its profitability guidance for 2024 and 2025," Andrew said.

Third-quarter guidance besides came successful good beneath expectations astatine $975 cardinal to $1 billion, up conscionable 1% to 3% organically. Analysts projected a stronger $1.15 billion.

The institution besides announced a $750 cardinal stock repurchase program.

Andrew kept her outperform standing connected Dexcom stock.

"We stay believers successful the communicative fixed our presumption of the marketplace outlook and Dexcom's beardown merchandise portfolio and ecosystem," she said. "We judge the reasons for the miss and usher down are (painfully) self-inflicted though yet should beryllium transient and manageable."

Follow Allison Gatlin connected X, the level formerly known arsenic Twitter, astatine @IBD_AGatlin.

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