Dexcom Earnings: New Patient Pools and New Applications of Dexcom Technology Offer Bright Future

No-moat Dexcom delivered a stellar quarter that reflected ongoing strength in its U.S. launch of G7 and displayed discipline on cost containment. At first blush, we expect to moderately raise our fair value estimate based on more optimistic longer-term adoption assumptions supported by the potential of new markets for Dexcom’s continuous glucose monitors. We also plan to give a minor boost to our full-year projections on this recent strength from G7 and strong performance in international markets. However, the effect of this near-term tinkering is likely to be small compared with our longer-term changes since our discounted cash flow model accounts for cash flows across multiple years.