Dexcom Shares Plunge After Forecast Cut

Dexcom announced a 15% increase in revenue, reaching $1 billion for the latest quarter, up from $871.3 million a year prior. However, this figure fell short of analysts' expectations of $1.04 billion, prompting the company to revise its full fiscal-year revenue guidance down to between $4 billion and $4.05 billion, a decrease from the previous forecast of $4.20 billion to $4.35 billion. CEO Kevin Sayer attributed the revenue shortfall to a restructuring of the sales team, fewer new customers, and lower revenue per user. The restructuring has led to significant disruptions, with Sayer noting that the company is "short a large number of new patients" compared to expectations. The changes in the sales force's geographic coverage have resulted in physicians interacting with different representatives, complicating customer acquisition. Additionally, some revenue losses were linked to customers utilizing rebates for the new continuous glucose monitor (CGM), the G7. In response to the disappointing results, JPMorgan downgraded Dexcom's stock from a buy to a hold, citing concerns over the company's internal challenges rather than external market factors. Analysts expressed surprise at the extent of the guidance drop, with some questioning the impact of the sales force changes. Despite the current struggles, analysts from William Blair and Leerink maintained a long-term positive outlook for Dexcom, suggesting that the recent stock sell-off may be overblown. As of Friday, Dexcom's shares have plummeted nearly 50% this year, contrasting sharply with the S&P 500's 15% gain.