Are Things Getting Better at DexCom (DXCM)?
An earnings quality review of the company’s third quarter
Before DXCM’s 2Q24 report, we warned in our June 5th analysis Is Growth Weakening at DexCom (DXCM)? that several indicators suggested the company’s headline growth rate was overstated due to accounting-related benefits. The company subsequently reported a highly disappointing second quarter, leading to a 40% decline in its stock price. (Note: we have temporarily removed the paywall for this report so that free subscribers can access our original observations.) After reviewing the 2Q24 10-Q, we further emphasized in Behind the DexCom Crash that these issues remained unresolved.
Fast forward to late October when DXCM reported adjusted EPS of $0.45 for 3Q24, beating consensus estimates by 2 cents with revenue exceeding expectations by only $3 million. The market responded coolly, and the stock has gradually declined about 3% since the announcement. Let’s get behind the numbers to examine how the accounting influenced results this time around…
Contact behindthenumbers@btnresearch.com for questions regarding our institutional research service.