Don’t be fooled by DexCom’s (DXCM 1.39%) 38% decline this year: This company is brimming with opportunity, and it still has a lot of potential to be a fantastic long-term investment, especially as of this week. On Thursday, July 28, the medical device manufacturer will release second-quarter earnings after the market closes, and it’ll provide significant new data that will likely drive movement in its stock prices.
Investors will be particularly interested in the company’s moves into foreign countries, and key updates about how quickly they should anticipate its presence to grow will be provided. Consider another pair of reasons why it may be a smart idea to invest if you’re thinking about purchasing a few shares.
1. It’ll be reporting on its successes with its recent product launches
The main product of DexCom is its wearable continuous glucose monitoring (CGM) system, and the firm is always working to add more capabilities and release new devices to make life simpler for people with diabetes. Last quarter, the firm began selling a limited quantity of units of its new CGM, the G7, as well as the sale of its DexCom One system in Spain and the United Kingdom. The One product combines older G6 monitors with a modified software package to allow users to monitor and manage their blood sugar levels in real time.
Within the first 60 days of its entry into Latvia, Lithuania, Estonia, and Bulgaria, DexCom One has achieved more than 1% of the market in those nations. That’s especially remarkable when you consider that patients in those countries had to pay for their systems out of pocket. Furthermore, if the firm proves that it can replicate its success in new areas that it just launched in, it will be a very beneficial development for the stock.
In addition, if its G7 monitors are selling well within the months after it debuted in the United States, it will set the stage for a similar success in international markets down the road. If quarterly sales rise by more than 25% year over year, as they did in Q1 when the quarterly sales were $629 million, that is especially good.
2. As a result of its worldwide initiatives, the firm is experiencing significant development, and new efforts to increase even more are undoubtedly on the way.
The second reason to invest in DexCom this week is linked to the first. It’s getting a lot of global exposure thanks to its successful product and new launches. Its revenue from markets outside of the United States increased by 44% in its fiscal 2021, reaching $599 million. At the time, it only generated 24% of its overall revenue from foreign markets, but after Q1 of this year, those same markets accounted for 28% of its quarterly income.
In other words, its overall growth rate is less reliant on U.S. success, which is a good indicator because rivalry will be the fiercest there. And it’s quite probable that the firm will continue to capitalize on its early successes internationally, just as it has domestically.
If you buy shares of DexCom ahead of time, before it makes a formal announcement of another large sales increase, you’ll be sure to benefit from price appreciation in the aftermath as well as any reporting of excellent earnings.
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