Earnings Miss: DexCom, Inc. Missed EPS By 7.8% And Analysts Are Revising Their Forecasts

It's been a good week for DexCom, Inc. (NASDAQ:DXCM) shareholders, because the company has just released its latest yearly results, and the shares gained 6.2% to US$89.34. It looks like the results were a bit of a negative overall. While revenues of US$4.0b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 7.8% to hit US$1.42 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for DexCom

Taking into account the latest results, the consensus forecast from DexCom's 23 analysts is for revenues of US$4.60b in 2025. This reflects a meaningful 14% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 34% to US$1.98. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$4.61b and earnings per share (EPS) of US$1.97 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The analysts reconfirmed their price target of US$101, showing that the business is executing well and in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values DexCom at US$120 per share, while the most bearish prices it at US$82.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that DexCom's revenue growth is expected to slow, with the forecast 14% annualised growth rate until the end of 2025 being well below the historical 20% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.0% annually. Even after the forecast slowdown in growth, it seems obvious that DexCom is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$101, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on DexCom. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple DexCom analysts - going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for DexCom that we have uncovered.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.