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DexCom Faces Regulatory Woes, Analysts Bullish on Comeback
13 Nov
Summary
- DexCom's stock price down 20% in past year
- FDA warning letter over unapproved device changes
- Class 1 recall for some CGM receivers
- Lawsuits claim false advertising, device malfunctions
As of November 13, 2025, DexCom (NASDAQ: DXCM), a leading medical device company specializing in continuous glucose monitoring (CGM) systems for diabetes patients, has been grappling with a series of issues that have weighed heavily on its stock price. Over the past 12 months, the company's shares have declined by 20% and are barely above their 52-week low.
Despite these challenges, Wall Street analysts remain optimistic about DexCom's prospects. The company's average price target of $87, according to Yahoo! Finance, represents a potential upside of around 58% from its current levels. Analysts believe that DexCom can overcome its recent setbacks and stage a turnaround.
The company's troubles began last year with the rollout of its latest CGM device, the G7, which led to higher-than-expected rebate eligibility, resulting in lower revenue per user and overall top-line growth. This temporary issue contributed to DexCom's worse-than-expected financial results in 2024.
More significantly, DexCom has faced legal and regulatory challenges this year. The U.S. Food and Drug Administration (FDA) issued a warning letter to the company, alleging that it had made unapproved changes to its marketed devices, including the G7 and the older G6, which the agency claimed had worsened the devices' glucose monitoring performance – a potentially life-threatening issue for diabetes patients. Additionally, the FDA issued a Class 1 recall for some of DexCom's CGM receivers.
In the midst of these regulatory troubles, several law firms have filed class-action lawsuits against DexCom, claiming that the company falsely advertised the reliability of its CGM systems and that its devices have malfunctioned.
Despite these challenges, DexCom's financial performance has shown signs of recovery. In the third quarter of 2025, the company reported revenue of $1.2 billion, a 21.6% increase compared to the same period a year ago. Adjusted earnings per share (EPS) also grew by 35.6% year-over-year to $0.61. The continued uptake of the G7 device, despite the quality concerns, has played a role in this improvement.
