Dexcom Stock, Down 15%, Is Haunted By Its 'Surprisingly Cautious' Outlook

Core Viewpoint - Dexcom's third-quarter earnings report showed strong sales growth but was overshadowed by a cautious outlook, leading to a significant drop in stock price [1][3]. Financial Performance - Dexcom reported $1.21 billion in sales for the third quarter, representing a 22% increase, or 20% in constant currency, surpassing expectations of $1.18 billion [4]. - The company achieved an adjusted earnings per share of 61 cents, exceeding analyst expectations of 57 cents [5]. Guidance and Market Outlook - Dexcom's revenue guidance for the year is expected to fall slightly below Wall Street's expectations, with analysts projecting sales growth of 11% to 13%, while the market had anticipated a 15% increase to $4.64 billion [2][4]. - The company is undergoing a CEO transition and facing challenges related to the reliability of its new G7 continuous glucose monitor (CGM) [5][6]. Analyst Reactions - Leerink Partners analyst Mike Kratky reduced his price target for Dexcom stock from $101 to $81 but maintained an outperform rating, describing the third-quarter report as "decent" [4]. - William Blair analyst Brandon Vazquez viewed the stock selloff as a buying opportunity, expecting trends to improve by 2026 and noting that the company is still adding new patients at a rate of 20% in the third quarter [6][7].