DexCom, Inc. DXCM is scheduled to release first-quarter 2025 results on May 1, after the closing bell. In the last reported quarter, the company’s earnings missed estimates by 10.00%.

The bottom line also outpaced the consensus mark in three of the trailing four quarters and missed in one, delivering an average surprise of 5.86%. (Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.)

Shares of DXCM have lost 8.5% so far this year compared with the industry’s 9.6% decline. The S&P 500 Index fell 6.4% in the same time frame.

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Q1 Estimates

Currently, the Zacks Consensus Estimate for revenues is pegged at $1.02 billion, indicating growth of 10.3% from the year-ago quarter’s reported figure. The consensus mark for earnings is pinned at 33 cents per share, implying 3.1% growth year over year.

Factors to Note

DexCom’s first-quarter 2025 outlook remains promising, with multiple tailwinds supporting potential growth. The expansion of the U.S. prescriber base, stabilization of the DME channel, strong international performance and the growing traction of Stelo are key factors driving optimism. Additionally, FDA approval for the 15-day G7 CGM could provide a long-term boost. While challenges such as competitive pressures and channel mix shifts remain, DexCom appears well-positioned to accelerate growth and improve financial performance in the rest of 2025.

U.S. Market Dynamics and Sales Force Expansion

DXCM’s quarterly performance is likely to have been shaped by expanded coverage. The company’s CGM for anybody with diabetes is covered by two of the three largest PBMs since January, which might have led to higher adoption during the soon-to-be-reported quarter. Moreover, the company's ongoing sales force expansion and efforts to stabilize its presence in the Durable Medical Equipment (“DME”) channel should have aided demand.

DexCom reported a record number of new patient starts in the past two quarters, which signals improving commercial execution. The addition of 50,000 new clinicians in 2024 is another strong indicator of potential growth. The increased base is expected to have contributed significantly in the soon-to-be-reported quarter.

Furthermore, DXCM has implemented a more balanced channel strategy, ensuring DME providers receive a fair share of prescriptions, which could have supported revenue stabilization in the first quarter. The U.S. revenues improved 4% year over year in the fourth quarter following a decline in the third quarter. The top line is likely to have continued to improve in the first quarter.

International Market Expansion and Reimbursement Wins

DexCom’s international segment showed resilience, growing 17% year over year in the last reported quarter, driven by the expanded availability of G7 and Dexcom ONE+. It launched G7 in Australia during the third quarter and gained coverage for Dexcom ONE+ in France and New Zealand during the fourth quarter, which significantly expanded the targeted patient population. The return to growth in Japan, where the new sales structure gained traction, was another key highlight.

Given the momentum in these regions, the first quarter is likely to have witnessed strong international revenue growth. The company’s ability to expand reimbursement coverage, particularly for Type 2 basal insulin users, remains a critical driver that may further boost sales in the coming quarters.

Stelo: A Game-Changer for the Non-Insulin Market

One of DexCom’s most promising growth drivers for the first quarter is likely to have been Stelo, the over-the-counter continuous glucose monitor (CGM) for people with prediabetes and Type 2 diabetes who are not on insulin. Since its launch in the third quarter, more than 140,000 people wore Stelo in the first four months of the launch, with demand spanning the type 2 diabetes, pre-diabetes, and health and wellness populations.

DXCM is planning to expand adoption of Stelo through product iteration, broad awareness campaigns and new distribution channels, including its introduction on the Amazon storefront. The company is building on the Stelo experience through targeted partnerships that will help consolidate multiple biomarkers into its platform. This includes the recently announced relationship with ??URA, which will integrate Dexcom glucose data with vital sign, sleep, stress, heart health and activity data from the Oura Ring to provide an even broader picture of health for our mutual customers.

Financial Outlook and Margin Expansion

On its fourth-quarter earnings call, DexCom issued its full-year 2025 revenue guidance of $4.6 billion, representing organic growth of 14%. The company expects margin improvement to continue in 2025 as it converts more of its installed base to G7 and drives greater scale at high-volume manufacturing facilities. The anticipated improvement in sales and margin is likely to be reflected in first-quarter results as well. Moreover, the company provided a launch plan for its 15-day G7 sensor during the earnings call.

DXCM’s strong cash position of $2.58 billion provides financial flexibility to support strategic initiatives, including share repurchases and product development.

DexCom, Inc. Price and EPS Surprise

DexCom, Inc. price-eps-surprise | DexCom, Inc. Quote

What Our Quantitative Model Suggests

Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.

Earnings ESP: DexCom has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3 at present.

Stocks Worth a Look

Here are a few medical stocks worth considering, as these have the right combination of elements to come up with an earnings beat this reporting cycle.

Agilent Technologies A has an Earnings ESP of +0.53% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

A’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.71%. The Zacks Consensus Estimate for fiscal second-quarter EPS implies a rise of 4.1% from the year-ago reported figure.

Globus Medical GMED has an Earnings ESP of +2.40% and a Zacks Rank of 3 at present. 

The company is scheduled to release first-quarter 2025 results on May 8. Its earnings surpassed estimates in each of the trailing four quarters, the average surprise being 19.86%. The Zacks Consensus Estimate for EPS implies an improvement of 2.8% from the year-ago reported figure.

EDAP TMS EDAP has an Earnings ESP of +2.03% and a Zacks Rank #3 at present.

EDAP delivered a trailing four-quarter average negative earnings surprise of 5.69%. The Zacks Consensus Estimate for first-quarter EPS implies a decline of 23.1% from the year-ago reported figure.

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Globus Medical, Inc. (GMED) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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