July 26, 2024:
Dexcom (DXCM) makers of a wearable blood sugar testing device, just took a MASSIVE hit on its stock price falling from $107 to $64 in a 2 day period, which occurred mostly on the heels of their Q2 report and forward looking guidance.
Why such a big drop in stock price?
Their sales climbed a healthy 15% year over year for the same period last year, but at the same time DXCM decreased their forward looking revenue guidance to $300 million instead of $500 million citing that they have 20% fewer new patient starts, verses projected new patient starts. At 70,000 new patients versus estimates of 85,000 it would seem like a small enough percentage to not take a 40% stock value hit, even with their Q3 reporting a $975 million to 1billion expectation, versus analysis estimates of $1.15 billion.
So why the change? Could it be weight loss drugs are finally reaching the targeted patient group Diabetic and pre-diabetic?
Sure, we've all seen similar revenue percentage drops have negative effects on stock prices, but this one is down 40% in one day's time. Isn't that a bit extreme?
Then it occurred to me, what if this is the new normal? What if companies that cater to diabetics and other weight-related issues are now facing a paradigm shift due to the rapid weight loss medication class of drugs that has now taken root in the medical and weight loss community?
Leave a Reply