DexCom (DXCM) PT Lowered to $520 at Stifel Following Q1 Report, but "Buy" Rating Maintained, "Bulk of The Headwinds are Transient in Nature"

Stifel analyst Mathew Blackman lowered the price target on DexCom (NASDAQ: DXCM) to $520.00 (from $555.00) while maintaining a Buy rating, following the company's Q1 report.

The analyst comments: "DXCM's 1Q22 revenues modestly exceeded expectations despite early quarter Omicron impact and while margins were pressured, the bulk of the headwinds are transient in nature. Most important, all previous 2022 guidance goalposts were reaffirmed. Takeaways: (1) Current trends: similar to ABT, US performance was a touch softer-than-expectations, but unlike ABT, DXCM growth accelerated sequentially; and, COVID remained a very real early quarter US headwind, particularly for the primary care channel, a key incremental growth driver. Trends in this channel though improved throughout the quarter and, notably, we think US volumes grew mid-30%+ (vs. 18% revenue growth); (2) 1Q Margins: softer-than-expected GMs are explained by several one-time items that will fade/reverse over the course of 2022, underscored by reaffirmed full-year GM/EBITDA guidance; (3) G7 updates: EU roll-out underway in UK, with more Tier 1 countries to follow. FDA dialogue continues with US approval now likely post-ADA (June) given FDA backlog."

By Vlad Schepkov

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