Stock of the Day

November 8, 2022

DexCom (DXCM)

$88.78
-$0.56 (-0.6%)
Market Cap: $34.91B

About DexCom

DexCom, Inc., a medical device company, focuses on the design, development, and commercialization of continuous glucose monitoring (CGM) systems in the United States and internationally. The company provides its systems for use by people with diabetes, as well as for use by healthcare providers. Its products include Dexcom G6 and Dexcom G7, integrated CGM systems for diabetes management; Dexcom Share, a remote monitoring system; Dexcom Real-Time API, which enables authorized third-party software developers to integrate real-time CGM data into their digital health apps and devices; and Dexcom ONE, that is designed to replace finger stick blood glucose testing for diabetes treatment decisions. It has also submitted FDA review for Dexcom Stelo for people with type 2 diabetes. The company has a collaboration and license agreement with Verily Life Sciences LLC and Verily Ireland Limited to develop blood-based or interstitial glucose monitoring products. It markets its products directly to endocrinologists, physicians, and diabetes educators. The company was incorporated in 1999 and is headquartered in San Diego, California.

DexCom Bull Case

Here are some ways that investors could benefit from investing in DexCom, Inc.:

  • DexCom, Inc. has a strong market capitalization of $34.94 billion, indicating a robust position in the medical device industry, which can provide stability and growth potential for investors.
  • The company reported a net margin of 14.29%, showcasing its ability to convert sales into actual profit, which is a positive indicator of financial health.
  • With a return on equity of 30.14%, DexCom, Inc. demonstrates effective management in generating profits from shareholders' equity, making it an attractive option for investors seeking efficient capital use.
  • Currently, the stock price is $89.45, which is significantly below its 1-year high of $142.00, suggesting potential for price appreciation as the market corrects.
  • Analysts have a consensus rating of "Moderate Buy" with a target price of $99.06, indicating positive sentiment and potential upside for investors.

DexCom Bear Case

Investors should be bearish about investing in DexCom, Inc. for these reasons:

  • The company recently missed earnings expectations, reporting $0.45 earnings per share against a consensus estimate of $0.50, which may raise concerns about its short-term profitability.
  • DexCom, Inc. has a relatively high P/E ratio of 62.37, suggesting that the stock may be overvalued compared to its earnings, which could deter value-focused investors.
  • Insider selling has been noted, with executives selling a total of 38,083 shares worth over $3 million in the last ninety days, which could signal a lack of confidence in the company's near-term performance.
  • The stock has experienced a significant decrease in trading volume, with only 303,395 shares traded compared to an average of 3,537,494, indicating reduced investor interest.
  • Despite a solid financial position, the company's debt-to-equity ratio of 0.59 suggests a moderate level of debt, which could pose risks if market conditions change.

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