Investing.com -- Benchmark on Monday started coverage of Dexcom with a Buy rating and a $77 price target, arguing the medical technology company is on track to expand margins meaningfully over the next two years as it rolls out a new sensor platform and ramps up lower-cost manufacturing.

The price target implies roughly 30% upside from the latest closing price.

Benchmark’s bullish case rests on Dexcom’s G7 15 Day continuous glucose monitor, which the company made widely available in January 2026 after receiving FDA clearance in April 2025. The sensor extends wear time to 15 days, reducing how often users need to change it, and has high accuracy.

Dexcom plans to discontinue its older G6 system on July 1 and migrate those users to the G7 platform, which Benchmark said will build manufacturing scale and drive cost efficiencies.

"Dexcom is poised for margin expansion over the next two years as it launches a new continuous glucose monitor sensor, the G7 15 Day system," analyst Bruce Jackson said. "The idea is to drive volume to the new platform while ramping up lower-cost manufacturing, leading to scale efficiencies and improved gross margins."

The company is guiding for adjusted gross margins of 63-64% in 2026, a roughly 200 basis point improvement over 2025.

A new manufacturing facility in Ireland is expected to weigh on operating margins during the first three quarters of 2026 before turning positive as the facility scales up late in the year, Jackson said.

International markets are also expected to boost volume, with Dexcom benefiting from expanded reimbursement coverage for insulin-using Type 2 diabetics in Germany, France, and the United Kingdom. International revenue grew 26% in the first quarter of 2026.

Benchmark also flagged potential additional upside from reimbursement coverage for non-insulin-using Type 2 patients, including through Medicare in the United States, which is not currently reflected in its estimates.