Dexcom plunges as revenue forecast cut spooks investors
Dexcom shares closed more than 40% lower on Friday after the glucose monitor maker slashed its annual revenue forecast due to the fallout from a salesforce revamp, prompting some analysts to question its long-term prospects.
The company's shares closed at a four-year low of $64, wiping out $25.45 billion from its market value.
Analysts highlighted rising competition from Abbott and Medtronic.
Baird analyst Jeff Johnson downgraded the stock to «neutral» from «outperform» and said Dexcom does not seem to be growing as fast as investors hoped to capture «basal only» diabetes patients who take one insulin injection a day.
«More importantly… it appears that Abbott is doing a better share of taking those basal only Type 2 patients and Dexcom's share is not keeping up,» said Johnson.
Last week, Abbott reported an 18% jump in second-quarter sales of its FreeStyle Libre devices. It expects the device, including a recently approved over-the-counter version, to bring in sales of $10 billion by 2028.
Dexcom now expects 2024 revenue of about $4 billion to $4.05 billion, compared with $4.20 billion to $4.35 billion earlier.
As part of the restructuring, Dexcom changed which doctors its salespeople would approach, resulting in fewer-than-expected new patients.
Some analysts said the process was more disruptive than feared, while others termed the company's problems «self-inflicted», stemming from poor management execution.
At least half of the brokerages covering Dexcom's stock slashed their price targets.
The company,
