Morgan Stanley, Truist Cautious on DexCom (DXCM) Cites Weaker Gross Margins, Modest Q3 Beat

DexCom Inc. (NASDAQ:DXCM) is one of the best QQQ stocks to buy according to Wall Street analysts. On November 10, Morgan Stanley cut the price target on DexCom to $63 from $89, while maintaining an Overweight rating on the shares.

Additionally, on November 3, Truist also lowered the firm’s price target on DexCom to $82 from $94 with a Buy rating on the shares. Truist noted that the company achieved only a modest beat on its Q3 2025  earnings and revenue targets. However, the reported gross margins were weaker than anticipated. The firm now expected analysts to lower their future financial estimates.

In the said quarter, DexCom reported making $1.21 billion in worldwide revenue, which marked a 22% year-over-year increase, or 20% organic growth. This performance resulted in the company achieving the highest quarterly EPS in its history, with a net income of $242.5 million, or $0.61 per share.

Despite the record revenue, the company’s gross profit margin saw a decline, falling to 61.3% from 63% in Q3 2024 due to higher-than-expected scrap rates at manufacturing facilities. The company therefore lowered its 2025 non-GAAP gross profit margin guidance to ~61%. However, DexCom raised its overall revenue guidance for the year to a range of $4.630 to $4.650 billion.

DexCom Inc. (NASDAQ:DXCM) is a medical device company that designs, develops, and commercializes continuous glucose monitoring/CGM systems in the US and internationally.

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Disclosure: None. This article is originally published at Insider Monkey.