Please ensure Javascript is enabled for purposes of website accessibility

Why Dexcom Is Soaring Today

By Brian Feroldi - Aug 2, 2018 at 11:59AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Traders cheer after the company reports impressive second-quarter results. Here's what investors need to know.

What happened

Shares of Dexcom (DXCM -3.30%), a medical device maker focused on diabetes, surged 23% as of 11 a.m. EDT on Thursday. The huge jump is attributable to the release of second-quarter results that smashed expectations and featured a huge boost to guidance.

So what

Here's a review of the key figures from Dexcom's second quarter:

  • Revenue jumped 42% to $242.5 million. For perspective, Wall Street was only expecting revenue of $204.9 million, so the company handily beat estimates.
  • Non-GAAP net loss was $9.2 million, or $0.10 per share. That was also much better than the $0.18 loss that market watchers were expecting.
WOrd diabetes on a keyboard

Image source: Getty Images.

The better-than-expected results also allowed management to significantly boost its guidance for the year. The company now expects full-year revenue of about $925 million. That's much higher than its prior range of $850 million to $860 million.

Given the significant beat-and-raise, it isn't hard to figure out why shares are flying high today.

Now what

Dexcom's second-quarter results should go a long way to silence the doubters who believed that Abbott Laboratories(ABT -1.71%) FreeStyle Libre glucose monitoring system was going to put a stop to the company's huge growth. Instead, Dexcom just reported an acceleration in its revenue growth rate, which suggests that the total market is large enough for both companies' products to coexist. 

Looking to the future, Dexcom's partnerships with Tandem Diabetes Care and Insulet should keep on serving as catalysts to drive continued adoption. In other words, investors have plenty of reasons to believe that this company's growth engine is still warming up.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

DexCom, Inc. Stock Quote
DexCom, Inc.
$321.20 (-3.30%) $-10.96
Abbott Laboratories Stock Quote
Abbott Laboratories
$112.58 (-1.71%) $-1.96
Insulet Corporation Stock Quote
Insulet Corporation
$194.39 (-2.82%) $-5.64
Tandem Diabetes Care Stock Quote
Tandem Diabetes Care
$73.06 (-2.21%) $-1.65

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/18/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.