What Happened?
Shares of medical device company DexCom (NASDAQ: DXCM) fell 2% in the morning session after Oppenheimer downgraded the stock to Perform from a previous Outperform rating.
The investment firm cited growing competition concerns as the primary reason for the ratings change. In addition to the downgrade, Oppenheimer also removed its $102 price target for the medical device maker. An analyst downgrade typically signals a less optimistic outlook on a stock's future performance, which can lead investors to sell shares and put downward pressure on the price.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy DexCom? Access our full analysis report here, it’s free.
What Is The Market Telling Us
DexCom’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 4 days ago when the stock gained 3.3% on the news that company executives provided an optimistic outlook at the Wells Fargo Healthcare Conference. During the conference, management expressed confidence in achieving "strong double-digit growth into the foreseeable future." The company also noted that a new product launch is "imminent."
A key catalyst highlighted was the expansion of market access, with the third quarter being the first time all three major Pharmacy Benefit Managers (PBMs) will provide coverage for its non-insulin diabetes products. The company's leadership described this expanded coverage as a "real good opportunity," signaling a positive trajectory for future sales and market penetration.
DexCom is up 0.8% since the beginning of the year, but at $79.17 per share, it is still trading 12.8% below its 52-week high of $90.75 from February 2025. Investors who bought $1,000 worth of DexCom’s shares 5 years ago would now be looking at an investment worth $813.64.
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