Dexcom Stock: The Bullish 2025 Call That Could Send Shares Soaring

Dexcom‘s (DXCM) revenue could reach $5.1 billion in 2025, the company said late Friday as it announced a new continuous glucose monitor. Dexcom stock, which has already risen 12% this year, could soar again.

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The announcements came during Dexcom’s investor day, the company’s first in three years. There’s been plenty to bolster Dexcom since then, Chief Executive Kevin Sayer told Investor’s Business Daily.

Dexcom is a leading maker of continuous glucose monitors, or CGMs. These body-worn devices help patients with diabetes keep tabs on their blood sugar in real time. Abbott Laboratories (ABT) and Medtronic (MDT) make competing devices.

In April, Medicare officials expanded reimbursement for CGMs to all patients who require insulin to manage their diabetes. Patients with a history of glucose incidents also will receive coverage.

Now, Dexcom’s “market access is expanding more rapidly than ever,” Sayer said.

The Medicare decision is “the biggest expansion ever in the history of the CGM category,” he said. “It has provided us access to a number of people who will benefit greatly from CGMs.”

Dexcom Stock: Increased 2025 Outlook

As a result, Dexcom now expects sales in 2025 of $4.6 billion to $5.1 billion. That’s an increase of $600 million from Dexcom’s previous range for the year. Dexcom’s sales last year rose 19% to $2.91 billion. Dexcom stock analysts polled by FactSet predict sales will rise 20% to $3.5 billion in 2023.

Much of the growth comes on the back of recent access wins combined with the upcoming launch of the newest G7 monitor, Sayer said. He expects the G7 to launch in most large international markets by the end of the year. In the meantime, the company will continue to sell its earlier iteration, the G6.

Dexcom also expects to launch a new product in 2024 for patients who don’t use insulin. It will include a 15-day wear timespan, a cash-pay option and tailored software options.

Sayer was mum on details other than to say “It won’t be geared toward insulin users, but instead people on the other end of the continuum.” That includes type 2 diabetes patients who have a less severe form of the disease and don’t need insulin treatment.

“This will provide those individuals information beneficial to their health,” he said.

Future Growth Areas For CGMs

Bullishly for Dexcom stock, the company also could have a footprint in the obesity treatment space.

That space has gotten an enormous amount of attention recently with the advent of weight-loss drugs like Novo Nordisk‘s (NVO) Wegovy and, likely soon, Eli Lilly‘s (LLY) Mounjaro. Mounjaro is approved for diabetes treatment, but the company is seeking approval in obesity treatment.

A continuous glucose monitor “can be a very vital part of that solution,” Sayer said. “CGM is truly the score card for how well these drugs are working on you.”

Looking out five years, the biggest new contributors to growth will be the use of CGMs in pregnant patients with gestational diabetes and hospitalized patients in need of glucose management. Those still aren’t reimbursed markets, however.

First, Dexcom needs to broaden its type 2 diabetes patient base, Sayer says.

“Hence the new product,” he said.

Dexcom Stock Is In A Buy Zone

Dexcom stock has been trading in the 5% chase zone above a buy point at 126.44 out of a flat base, according to MarketSmith.com. Promisingly, shares are well above their 50-day and 200-day lines.

Dexcom stock is highly rated across the board. Shares have a Composite Rating of 98 out of a best-possible 99, IBD Digital shows. This puts Dexcom’s fundamental and technical measures in the top 2% of all stocks.

Shares also have a Relative Strength Rating that puts them in the top 10% of all stocks when it comes to 12-month performance.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.

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