DexCom prepares for earnings report with high volatility expectations

DexCom Inc. (NASDAQ:DXCM), a leading company in diabetes management technology, is preparing to release its earnings report on May 1, 2025. Analysts have noted that the company historically experiences significant stock price volatility around its earnings announcements. This behavior suggests investors may face considerable risks and rewards surrounding the upcoming report. Consensus forecasts predict DexCom will report earnings per share of $0.33, alongside revenue estimates of $1.02 billion. These figures indicate a slight improvement from the previous year's first quarter, which recorded $0.32 EPS on $921 million in revenue. The company currently boasts a market capitalization of around $28 billion, with trailing twelve-month revenues hitting $4 billion and operating earnings of $600 million, alongside a net income of $576 million. Market participants closely observe historical earnings reactions, as DexCom's stock has shown mixed results in past announcements. Specifically, an analysis of 18 earnings records from the last five years reveals that investors have experienced positive one-day post-earnings returns approximately 39% of the time. Notably, this success rate appears to improve when focusing on more recent data, with a 45% rate over the last three years. The average positive one-day return has been approximately 9.3%, while negative returns have averaged around -5.0%. Traders may leverage this historical performance to build advantageous positions before the impending earnings report. Moreover, the correlation between immediate and medium-term returns can influence trading strategies. If short-term returns following the announcement show strong correlation to medium-term behaviors, traders may choose to enhance their positions based on these indicators. Similarly, assessment of peer performance can impact stock reactions, with evidence suggesting prior earnings reports from comparable firms can set the tone for DexCom's stock movements as the date of its earnings report approaches.