DexCom (DXCM) could deliver its sales growth outlook even after its solid Q3 sales beat was overshadowed by margin weakness, UBS said in a report Friday.

"Our conviction is that CGM is shifting to standard of care across all diabetics," the report said. CGM refers to continuous glucose monitoring.

"And with expanded non-insulin using T2 coverage likely in 2026, we think DXCM can and should return to sustainable mid-to-high teens sales growth in 2026+," the note added.

UBS cut its price target to $95 from $106 while reiterating its buy rating, pointing to its valuation at a discount to historical levels despite double-digit growth and strong fundamentals.

Shares of DexCom were up over 3% in recent Monday trading.

Price: 60.03, Change: +1.81, Percent Change: +3.11