DexCom's (DXCM) Q4 results demonstrated the company's stable performance, with expectations for it to continue, Morgan Stanley said in a Friday note.

"After a rockier couple quarters, the print was encouraging in as much as it demonstrated stability, and we came away with expectations for more of the same with a steady improvement in the US over time," the report said.

The note said stability in Durable Medical Equipment is key for 2025, which is achievable.

"Dexcom's current '25 guidance does not contemplate DME share regained over the course of the year, meaning there could be some upside on the table if partnerships can be restored near prior levels," the report said.

Morgan Stanley raised its price target on the stock to $82 from $75 while keeping its equal-weight rating, saying that the shares continue to "fairly reflect upside and downside risks."

Shares of DexCom were up nearly 6% in recent trading.

Price: 89.02, Change: +4.93, Percent Change: +5.86