DexCom (NasdaqGS:DXCM) Q3 2020 Earnings Prep

in EARNINGS/INVESTING IDEAS by

DexCom, Inc. (NasdaqGS:DXCM) is scheduled to report Q3 earnings results after markets close for trading on October 27, 2020.

The company is expected to report earnings of $0.64/share on revenue of $478.6 million. The consensus earnings per share (EPS) of $0.64/share is based on a poll of 19 analysts and represents a decline in eps of −0.9% over the same quarter last year, when the company reported earnings of $0.65/share.

The revenue forecast of $478.6 million based on a poll of 18 analysts implies a year-over-year (YoY) growth in revenue of 20.8%. Last year the company reported $396.3 million in revenue for the quarter.

Expected to report EPS contraction of −0.9% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $478.55 $396.30 20.8%
EPS $0.64 $0.65 −0.9%

Earnings Call Trends

Management has been great at managing analyst expectations historically. The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance.

What are your expectations from DexCom, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.36 $0.79 118.9% Beat
Q1, 2020 $0.15 $0.44 195.1% Beat
Q4, 2019 $0.73 $1.15 57.3% Beat
Q3, 2019 $0.20 $0.65 219.2% Beat
Q2, 2019 -$0.01 $0.08 978.2% Beat
Q1, 2019 -$0.16 -$0.06 66.0% Beat
Q4, 2018 $0.16 $0.54 239.2% Beat
Q3, 2018 -$0.10 $0.17 276.3% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price did not react much to the update.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 28, 2020 $423.43 $427.08 0.9% Increase
April 28, 2020 $335.05 $345.47 3.1% Increase
February 13, 2020 $246 $283.91 15.4% Increase
November 6, 2019 $153.56 $194.70 26.8% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.45, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.45 implies a 0.7% chance of earnings manipulation.

Fundamentals And Technical Analysis

DexCom, Inc. is currently trading at $392.43/share, down −1.3% for the day. The company is trading at approximately 86.0% of its 52-week high of $456.23/share. The company’s stock price is down −8.1% since the last earnings report and down −0.4% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 48.07 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:DXCM Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 183.55 and a forward P/E multiple of 146.66.

DexCom, Inc.’s current share price also implies a price-to-book (P/B) multiple of 27.75. The following table summarizes some other key fundamental ratios:

Data as of October 21, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $392.43
P/E Ratio 183.5x
P/E Ratio (Fwd) 146.7x
PEG Ratio 0.9
Total Debt / Total Capital 4.4%
Levered Free Cash Flow $209 million
EV / EBITDA 117.7x

Finbox

DexCom, Inc. is a large-cap stock with a market capitalization of $37.572 billion and a total enterprise value of $36.825 billion. The company operates in the Healthcare sector and the Healthcare Equipment & Supplies industry.

DexCom, Inc., a medical device company, focuses on the design, development, and commercialization of continuous glucose monitoring (CGM) systems in the United States and internationally. The company offers its systems for use by people with diabetes, as well as for use by healthcare providers. Its products include DexCom G6, a CGM system for diabetes management; DexCom G5 mobile CGM system to communicate directly to patient’s mobile device; DexCom G4 PLATINUM system for continuous use by adults with diabetes; and DexCom Share, a remote monitoring system. DexCom, Inc. has a collaboration and license agreement with Verily Life Sciences LLC and Verily Ireland Limited to develop a series of next-generation CGM products; and a collaboration with Companion Medical, Inc. The company markets its products directly to endocrinologists, physicians, and diabetes educators. DexCom, Inc. was founded in 1999 and is headquartered in San Diego, California.

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