What happened
A notable price target reduction by an analyst was followed by a price drop of DexCom (NASDAQ: DXCM) stock on Friday. Investors exited the specialty medical device maker, sending its value down more than 5%. That was a much steeper decline than the benchmark’s 1.2% decline S&P500 Table of contents.
So
Raymond James forecaster Jayson Bedford was the person behind the chop. Before the market opened, he lowered his DexCom price target to $131 per share from the previous level of $154. That was the bad news. The good news was that he maintained his strong buy rating on healthcare stocks.
Bedford isn’t the only analyst who has lowered his expectations for DexCom lately. Last week Danielle Antalffy from UBS also lowered her price target significantly, from her previous $175 to $138. Like Bedford, she remained bullish on the stock, leaving her buy rating intact.
Despite these cuts, there is still optimism in the air for DexCom due to the company’s position in the market. It is a leader in the lucrative niche segment of continuous blood glucose monitoring. Last year it launched a new device, the G7, which it claims is the most accurate monitoring product on the market. According to the company, it also has the fastest warm-up time.
What now
Collectively, the analysts currently covering DexCom expect growth both this year and next. They model a nearly 22% revenue improvement for 2023 over the previous year, and a nearly 43% jump in per-share profitability. By 2024, these statistics are expected to grow by 20% and 30% respectively.
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Eric Volkman has no positions in the stocks mentioned. The Motley Fool recommends DexCom. The Motley Fool has a disclosure policy.
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