Shares of DexCom (DXCM) plummeted 14.81% in Friday's trading session, as investors reacted negatively to the company's disappointing long-term growth outlook, overshadowing better-than-expected third-quarter results. The continuous glucose monitoring systems manufacturer saw its stock hit its lowest levels since March 2020, despite reporting strong performance for the latest quarter.

DexCom's third-quarter adjusted earnings per share came in at $0.61, surpassing analyst estimates of $0.57. Revenue also beat expectations, reaching $1.209 billion compared to the anticipated $1.178 billion. However, the market's focus quickly shifted to comments made during the earnings call regarding the company's future growth prospects.

Interim CEO Jake Leach signaled that DexCom's 2026 growth forecast could fall short of Wall Street expectations. While affirming that 2026 growth would "certainly be in the double-digit range," Leach stated that "the top end of our range is probably slightly below where the Street is today for our base case." This cautious outlook triggered a wave of concern among investors, who had been expecting a more robust long-term growth trajectory for the company.

The market reaction was swift and severe, with several analysts revising their price targets downward in response to the tempered growth expectations. TD Cowen cut its target price to $84 from $100, while JPMorgan lowered its target to $75 from $90. Citigroup, Piper Sandler, and Mizuho also reduced their price targets, reflecting growing concerns about DexCom's future performance in the competitive continuous glucose monitoring market.

Despite the current setback, some analysts maintain a positive long-term outlook for DexCom, citing its strong position in the diabetes care technology sector. However, the significant stock drop suggests that investors are recalibrating their expectations for the company's growth potential in the coming years.