10 Worst Performing Healthcare Stocks in 2024

2. DexCom, Inc. (NASDAQ:DXCM)

Total YTD Return: -43.95% 

DexCom, Inc. (NASDAQ:DXCM) is a medical device company that specializes in continuous glucose monitoring (CGM) systems for diabetes management. It develops, manufactures, and sells CGM devices that provide real-time glucose readings, enabling patients to monitor their blood sugar levels without frequent finger pricks. The primary product is a small sensor inserted under the skin, which transmits glucose data to a smartphone or other display device.

In Q3 2024, DexCom, Inc. (NASDAQ:DXCM) reported total revenue of $994 million, a modest increase from $975 million in Q3 2023, translating to a 2% growth on a reported basis and 3% organic growth. However, this growth was primarily driven by international markets, where revenue increased by 12% to $292 million, while U.S. revenue declined by 2%, totaling $702 million. The decline in U.S. sales was attributed to slower new customer starts and a reduction in revenue per customer due to increased rebate eligibility, which negatively impacted growth by approximately 6 percentage points.

Despite the slight revenue growth, the company’s profitability metrics reflected challenges. The gross profit margin decreased to 63% from 64.7%, and operating income fell to $212 million, representing 21.3% of revenue, down from 24.5% the previous year. This decline was exacerbated by a $24.6 million non-cash charge related to inventory issues, which further strained profitability.

Although not officially confirmed by DexCom, Inc. (NASDAQ:DXCM), some analysts speculate that the rising popularity of GLP-1 weight loss drugs may impact the demand for continuous glucose monitoring (CGM) devices. These drugs help patients manage diabetes and lose weight, potentially decreasing the need for CGM systems.

As tracked by the Insider Monkey database, 55 hedge fund holders held shares in DexCom, Inc. (NASDAQ:DXCM) in Q3 2024, with D E Shaw being the largest stakeholder with shares worth $162.8 million.