Dexcom stock pops as Medicare considers coverage for diabetic monitors

Shares of Dexcom are up after Medicare proposed a local coverage determination for its diabetic monitors.

Video Transcript

RACHELLE AKUFFO: It's time for Triple Play, the three stocks that we're watching in the final 30 minutes of trading. We've got Dexcom, Lyft, and Credit Suisse. Now, my pick is biotech company, Dexcom. Ticker, DXCM. Now, the company's focus is wearable continuous glucose monitoring or CGM that's associated with diabetes.

Now, even despite a market sell overall, the stock's still jumping today up almost 7%. Now, that's after the Centers for Medicare and Medicaid Services issued a proposed local coverage determination. That actually paves the way for it to be covered by Medicare in certain regions. Now, that was welcome news to analysts, including Piper Sandler's Matt O'Brien who raised the price target to $120 from $110 per share saying, "DXCM will reclaim its position as the highest multiple name in diabetes following this announcement."

We also heard from Wells Fargo's Larry Biegelsen who says, "If finalized, this will double the market opportunity for CGM to 8 million patients per year." But of course, rivals in this space, Abbott Laboratories and Senseonics Holdings, under pressure following that news. And of course, it's been a bumpy overall for those companies and for Dexcom as well. That stock down 22% year-to-date, Seana.

SEANA SMITH: Yeah. Rachelle, you mentioned some of that analyst commentary there. Stifel also out upping its price target to $120 a share saying that this is clearly a positive development. But, quote, "seemingly little in the way of proposed patient restrictions there." So big reason why we're seeing that positive analyst commentary, a big reason why we're seeing the stock pop as much as it is today.

And overall, the street is very bullish on this name. This stuck out to me, 15 buys, two holds, and zero sells on the stock. So when you take into account that Dexcom still off 22% year-to-date yet there's zero sell ratings on the stock right now really shows how bullish the street is at this point.