DXCM - DexCom hits six-month high after Q3 beat

DexCom ( NASDAQ: DXCM ) climbed ~16% intraday Friday to reach the highest level since April after the medical device maker posted better-than- expected financials for Q3 2022, drawing favorable views on Wall Street.

After the results, the analysts from Baird, Wells Fargo, Cowen, and Citi raised their price targets on the San Diego, California-based maker of continuous glucose monitoring (CGM) systems.

“3Q results checked a lot of boxes,” Baird analysts led by Jeff Johnson noted, reiterating their Outperform rating and boosting the price target on the stock to $120 from $97 after the company’s earnings call on Thursday.

With DXCM’s revenue rising ~18% YoY to $769.6M during the quarter, Johnson and the team expect the company to accelerate its global revenue growth to the low/mid-20%+ range next year and sustain the growth at that level for at least next 3-5 years.

The team also highlights several upcoming catalysts that could further generate upside for the stock, including the potential FDA approval and launch of the company’s G7 CGM device and a recent Medicare proposal to expand coverage for CGM devices.

“We believe these catalysts should also make DXCM a defensive play in an increasingly uncertain macro environment, adding to the appeal of this stock heading into 2023,” Baird concluded.

The earnings-led rally comes at a time when DexCom ( DXCM ) trades ~16% below its year-ago level, as indicated in this graph.

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