Dexcom plunges as revenue forecast cut spooks investors

Reuters

Dexcom plunges as revenue forecast cut spooks investors

2024 7월 26 일, 오전 10:52 GMT

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Updates shares in paragraph 1-2

By Bhanvi Satija

July 26 (Reuters) -Dexcom DXCM.O shares closed more than 40% lower on Friday after the glucose monitor maker slashed its annual revenue forecast due tothe fallout from a salesforce revamp, prompting some analysts to question its long-term prospects.

The company's sharesclosed at a four-year low of $64, wiping out$25.45 billion from its marketvalue.

Analysts highlighted risingcompetition from Abbott ABT.N and Medtronic MDT.N.

Baird analyst Jeff Johnson downgraded the stock to "neutral" from "outperform" andsaid Dexcom does not seem to be growing as fast as investors hoped to capture "basal only" diabetes patients who take one insulin injection a day.

"More importantly ... it appears that Abbott is doing a better share of taking those basal only Type 2 patients and Dexcom's share is not keeping up," said Johnson.

Last week, Abbott reported an 18% jump in second-quarter sales of its FreeStyle Libre devices. It expects the device, including a recently approved over-the-counter version, to bring in sales of $10 billion by 2028.

Dexcom now expects 2024 revenue of about$4 billion to $4.05 billion, compared with$4.20 billion to $4.35 billion earlier.

As part of the restructuring, Dexcom changed which doctors its salespeople would approach, resulting in fewer-than-expected new patients.

Some analysts said the process was more disruptive than feared, while others termed the company's problems "self-inflicted", stemming from poor management execution.

At least half of the brokerages covering Dexcom's stock slashed their price targets.

The company, which signaled it had lost some market share for devices sold through distributors, also saidrebates, or after-market refunds, for its G7 glucose monitors affected how much revenue it made per customer in the second quarter.

The rebates were implemented in little over a year, compared with theexpected two-year timeline.

Recent share performance of glucose monitor makers https://reut.rs/3y4aDvX

Reporting by Kanchana Chakravarty and Bhanvi Satija in Bengaluru, additional reporting by Sneha S K; Editing by Sriraj Kalluvila and Devika Syamnath

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