DexCom (NASDAQ:DXCM) is set to publish its earnings report on Thursday, May 1, 2025. Historically, the stock has shown considerable volatility surrounding its earnings announcements. In the last five years, DXCM reported a negative one-day return 61% of the time, with a median negative return of -8.2% and a peak negative return of -40.7%. This historical behavior indicates a high level of price variability during earnings announcements.
For traders focused on events, comprehending these historical patterns may provide a potential advantage. Two main strategies arise: first, evaluating historical probabilities to create a position prior to the earnings disclosure; second, analyzing the relationship between immediate and medium-term returns following the announcement to guide subsequent positioning.
Currently, consensus forecasts estimate earnings per share at $0.33 on revenue of $1.02 billion, compared to the previous year’s first quarter numbers of $0.32 EPS on $921 million in sales.
From a fundamental standpoint, DexCom currently has a market capitalization of $28 billion, with trailing twelve-month revenue of $4.0 billion, operating earnings of $600 million, and net income of $576 million.
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DexCom Stock’s Historical Probability Of Positive Post-Earnings Return
Some insights on one-day (1D) post-earnings returns:
- There are 18 earnings records noted over the last five years, with 7 positive and 11 negative one-day (1D) returns notable. In total, positive 1D returns occurred roughly 39% of the time.
- Importantly, this percentage rises to 45% if we review data from the past 3 years instead of 5.
- Median of the 7 positive returns = 9.3%, and the median of the 11 negative returns = -5.0%
Supplementary data for observed 5-Day (5D) and 21-Day (21D) returns following earnings are compiled along with the statistics in the table below.
DexCom Stock’s Correlation Between 1D, 5D, and 21D Historical Returns
A relatively lower-risk strategy (though not effective if the correlation is weak) is to evaluate the correlation between short-term and medium-term returns after earnings, identify a pair that exhibits the highest correlation, and execute the suitable trade. For instance, if 1D and 5D exhibit the highest correlation, a trader may position themselves “long” for the following 5 days if the 1D post-earnings return is positive. Here is some correlation data based on 5-year and 3-year (more recent) history. Note that the correlation 1D_5D indicates the correlation between 1D post-earnings returns and subsequent 5D returns.
Is There Any Correlation With Peer Earnings?
Occasionally, peer performance can affect post-earnings stock response. Indeed, the price adjustment might commence even before the earnings are publicized. Below is some historical data on the past post-earnings performance of DexCom stock compared to the stock performance of peers that reported earnings shortly before DexCom. For a fair comparison, peer stock returns also illustrate post-earnings one-day (1D) returns.
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