Dexcom Dips Despite Q4 Beat as 2026 Outlook Signals Slower Growth
The continuous glucose monitor maker's full-year forecast of 11-13% growth falls short of some analyst expectations, overshadowing a strong quarterly performance.
Shares of Dexcom, Inc. (NASDAQ: DXCM) edged lower in recent trading, falling approximately 1.5% despite the company posting preliminary fourth-quarter revenue that surpassed analyst expectations. The negative pressure on the stock stems from a 2026 financial outlook that, while showing double-digit growth, signals a potential slowdown compared to the company's recent performance.
The medical device maker announced its preliminary, unaudited revenue for the fourth quarter of 2025 was approximately $1.26 billion, a robust 13% increase year-over-year that topped consensus estimates of $1.178 billion. For the full fiscal year 2025, revenue grew 16% to approximately $4.66 billion. However, investor attention quickly shifted to the company's initial guidance for 2026. Dexcom projected total revenue between $5.16 billion and $5.25 billion, which represents growth of 11% to 13%.
While strong by most standards, that forecast has been met with a mixed reception from Wall Street. The projected growth rate for 2026 is a noticeable deceleration from the 16% achieved in 2025. This has led some analysts, including those at Piper Sandler and Bernstein, to trim their price targets on the stock, citing concerns that the growth trajectory is flattening more than anticipated. Still, the broader analyst community remains largely positive on Dexcom's long-term prospects, with over 20 'Buy' ratings compared to just four 'Holds' and no 'Sells'.
The company's outlook is heavily dependent on the continued success of its continuous glucose monitoring (CGM) devices, particularly the recently launched G7 sensor. Dexcom began rolling out its next-generation 15-day G7 sensor in the United States on December 1, 2025, a critical product launch intended to defend its market-leading position. In its announcement, management expressed confidence in its 2026 forecast, highlighting strong underlying demand and benefits from the new product cycle.
However, the G7's introduction has not been without difficulties. The device launch followed a year in which Dexcom navigated a Class I recall in May 2025 for certain CGM receivers and an FDA warning letter in March 2025 concerning manufacturing deficiencies. These challenges provide important context for the company's operational execution as it scales its latest technology.
The competitive landscape in the diabetes technology space remains fierce. Dexcom faces intense pressure from its primary rival, Abbott Laboratories, which is aggressively expanding its Freestyle Libre product ecosystem. In a notable market development, Abbott and Medtronic have entered into a 'coopetition' deal for CGMs, further intensifying the battle for market share. Medtronic itself is pushing forward with its own integrated systems, having recently received FDA approval for its Simplera Sync CGM.
For Dexcom, with a market capitalization of over $26 billion, the path forward involves balancing the successful ramp-up of its G7 device, navigating a complex regulatory environment, and fending off well-capitalized competitors. Investors will be closely watching for the company's full audited results and management's detailed commentary on its upcoming earnings call to better gauge whether the 2026 guidance is a conservative starting point or the new standard for growth.