Piper Sandler’s Top Technical Stock Picks: 20 Best Stocks

2. DexCom, Inc. (NASDAQ:DXCM)

Number of Hedge Fund Holders In Q2 2024: 64

DexCom, Inc. (NASDAQ:DXCM) is a specialty medical devices company that enables diabetics to monitor their glucose levels. Just like Insulet, whose devices enable patients needing insulin to take the medicine round the clock, DexCom, Inc. (NASDAQ:DXCM)’s systems enable round the clock monitoring of sugar levels. Consequently, the firm enjoys a significant competitive strength in the market, and given the ironically stable nature of its market, DexCom, Inc. (NASDAQ:DXCM) can continue operating smoothly in the future. However, since 94% of the firm’s revenue comes through its disposable sensors for diabetics, a strong competitor that offers superior products can disrupt DexCom, Inc. (NASDAQ:DXCM)’s business. Additionally, while investor worries of weight loss drugs shrinking the diabetes market have since dissipated, future drugs that reduce the need for round the clock monitoring can prove to be a headache. Additionally, since 85% of DexCom, Inc. (NASDAQ:DXCM)’s H1 2024 revenue was through distributors, any troubles on this front could create headwinds. Potential catalysts for the stock include deeper market penetration and innovation.

Artisan Partners mentioned DexCom, Inc. (NASDAQ:DXCM) in its Q2 2024 investor letter. Here is what the fund said:

“Dexcom detracted from performance in the quarter as the stock price gave back all the strong gains from the first quarter of this year. The company reported strong first quarter earnings, beating consensus estimates for the top and bottom lines, highlighted by 25% organic revenue growth. Additionally, it raised the low end of full-year revenue guidance based on the strong start to the year, with record new patient starts. Dexcom is launching an over-the-counter continuous glucose monitoring device set to target the over 25 million Type 2 diabetes patients who are not dependent on insulin. Furthermore, the medical device company recently expanded its salesforce to better address the ~200K primary care physicians in the United States. We see several catalysts going forward, and the stock is trading at a discount to historical valuation metrics.”