DexCom Shares Face Mounting Challenges Amid Product Transition

DexCom finds its equity under significant pressure within a challenging market landscape. The company is navigating a critical strategic shift away from its legacy product while contending with prominent investor skepticism and approaching legal deadlines.

A pivotal operational change is underway at DexCom. The manufacturer will cease production of its G6 continuous glucose monitoring (CGM) system after July 1, 2026. This system, approved since 2018, has long been a foundational component of the business. This move mandates a complete transition to the newer G7 platform and the developing G8 technology. This shift carries inherent risk, as the G7 platform has previously been under regulatory scrutiny. Class I FDA recalls in June and September 2025 related to the G7 created notable investor unease.

Clashing Investor Sentiments

Market sentiment is currently divided. On one side, prominent financial television personality Jim Cramer labeled DexCom shares as "too expensive" on December 13, advising against purchase. His caution stems from ongoing competition from GLP-1 weight-loss medications, which he views as a sustained long-term risk to the CGM market.

Should investors sell immediately? Or is it worth buying DexCom?

Contrasting this view is the perspective of institutional investors such as Sands Capital. In its quarterly outlook, the investment firm pointed to the stock's historically low price-to-earnings ratio as a potential opportunity. Its bullish thesis rests on three pillars: the rollout of the new 15-day sensor, expanded Medicare reimbursements, and anticipated margin improvements beginning in 2026.

Legal Overhangs and the Path Forward

The current volatility is compounded by pending class-action litigation. Law firms including Levi & Korsinsky and The Rosen Law Firm have highlighted key deadlines for lead plaintiffs on December 26 and 29, 2025. The allegations encompass a range of issues, from unauthorized design changes to devices to exaggerated advertising claims and a failure to disclose regulatory risks.

For shareholders, the situation presents a clear dichotomy. The stock is caught between the "value trap" narrative pushed by skeptics and the "turnaround" story advocated by supporters who are betting on the success of the new product cycle. The coming months, leading to the 2026 G6 production halt, will be critical in determining whether DexCom can manage this product transition smoothly.