Shares of Dexcom (DXCM 2.50%), a leader in the growing market for blood sugar trackers, jumped 47.4% in November, according to data from S&P Global Market Intelligence. Another quarterly report filled with positive signals was the spark that started the rally.
Glucose monitors that sync with smartphones are gaining popularity fast, and Dexcom's third-quarter earnings report suggests its G6 system is leading the pack. Compared with the prior-year period, revenue grew 49% to $396 million.
Beneath the top line, it looks like the company's easy-to-use solutions are flying off shelves all by themselves. Third-quarter operating expenses rose just 23% to $191 million.
Dexcom also raised its expectations for the rest of 2019. Instead of a range of $1.33 billion to $1.38 billion, total revenue is expected to reach between $1.43 billion and $1.45 billion this year. On the bottom line, adjusted operating earnings are expected to reach 9% of total sales instead of the 7% operating margin the company had been expecting just a few months earlier.
There's no shortage of glucose monitoring options for diabetes patients to choose from, but Dexcom's devices could command a leading share of the market for the foreseeable future. In October, the company officially started selling everything needed to begin using a G6 to Medicare patients in partnership with Walgreens.
Keeping glucose levels in a normal range has been shown to reduce the risk of problems common among diabetes patients, such as vision loss. That means Medicare can save a bundle over the long run by providing Dexcom's devices.