Shares of DexCom (DXCM -3.63%) and Insulet (PODD -3.63%) rocketed 82.6% and 116%, respectively, last year, according to data from S&P Global Market Intelligence. The S&P 500 returned 31.5% over this period.
Both medical-device companies are focused on the diabetes space and were among last year's top-performing large-cap stocks in the healthcare space. DexCom makes a continuous glucose monitoring (CGM) system, the G6. Insulet is a leader in tubeless insulin-pump technology with its Omnipod pump.
We can attribute these two diabetes stocks' strong 2019 performances to the companies' robust financial performances and investor optimism about their growth potential. Diabetes is (unfortunately) a growth space, as the global incidence of the disease -- both types 1 and 2 -- has been rising for some time and is expected to continue to increase.
Let's look at these two companies' most recent quarterly reports. In the third quarter, DexCom's revenue soared 49% year over year to $396.3 million. Adjusted earnings per share (EPS) rocketed 261% to $0.65, smashing the $0.20 that Wall Street had expected. In the third quarter, Insulet's revenue jumped 27% year over year to $192.1 million, and adjusted EPS tripled to $0.09, crushing the analyst consensus estimate of $0.03.
Investors should be getting material news next month from both diabetes companies.
DexCom hasn't yet scheduled a date for the release of its fourth-quarter and full-year 2019 results, but it should be in mid-to-late February. For the full year, the company has guided for revenue growth of 38% to 41% year over year. Moreover, it expects a gross profit margin of 63% and an operating profit margin of 7%.
Insulet is slated to report its fourth-quarter and full-year results on Monday, Feb. 24, after the market closes. For the full year, it expects revenue to increase about 28% to 29%. The company doesn't provide a profitability outlook.
DexCom and Insulet have a business tie. Late this year, Insulet plans to launch its Horizon automated insulin-delivery system, which uses a DexCom continuous glucose monitor to dose insulin.