DexCom Inc (DXCM, Financial) has recently experienced a notable uptick in its stock performance, with a 3.36% gain over the past week and an impressive 13.98% gain over the past three months. The company's market capitalization stands at $53.65 billion, and the current stock price is $139.17. When compared to the GF Value of $157.05, DexCom's stock is currently considered modestly undervalued, a consistent valuation from three months ago when the GF Value was $148.13. This suggests that the stock may still have room to grow to reach its intrinsic value as defined by GuruFocus.com.
Introduction to DexCom Inc
DexCom Inc, operating within the Medical Devices & Instruments industry, is at the forefront of diabetes care with its innovative continuous glucose monitoring (CGM) systems. These systems offer a significant advancement over traditional blood glucose meters by providing real-time glucose readings and integrating with insulin pumps for automated insulin delivery. DexCom's commitment to improving the quality of life for diabetic patients through technology has positioned it as a key player in the healthcare sector.
Assessing DexCom's Profitability
With a Profitability Rank of 6/10, DexCom demonstrates solid financial health. The company's operating margin of 16.50% is better than nearly 80% of its industry peers. Additionally, DexCom's return on equity (ROE) of 25.07% and return on assets (ROA) of 8.85% surpass the majority of competitors, with ROE and ROA better than 94.24% and 84.55% of industry peers, respectively. The return on invested capital (ROIC) stands at an impressive 18.98%, indicating efficient capital utilization. Over the past decade, DexCom has maintained profitability for five years, outperforming 38.83% of its industry counterparts.
Exploring DexCom's Growth Trajectory
DexCom's Growth Rank is an exceptional 9/10, reflecting its robust expansion in both revenue and profitability. The company's 3-year revenue growth rate per share of 19.90% and 5-year rate of 22.40% are higher than those of over 77% and 83% of industry peers, respectively. Looking ahead, the estimated total revenue growth rate for the next 3 to 5 years is 18.34%, which is more favorable than 81.44% of competitors. While the 3-year EPS without NRI growth rate is a modest 0.60%, the future 3 to 5-year EPS growth rate estimate is a remarkable 30.63%, outpacing 92.5% of industry peers.
Investor Confidence in DexCom
Notable investors have taken significant positions in DexCom, demonstrating confidence in the company's prospects. Baillie Gifford (Trades, Portfolio) holds 16,520,313 shares, representing a 4.33% share percentage. Frank Sands (Trades, Portfolio) is close behind with 15,058,806 shares, accounting for 3.91% of the company's shares. Chase Coleman (Trades, Portfolio) also maintains a stake with 1,152,806 shares, equating to a 0.3% share percentage. These investments by prominent holders underscore the attractiveness of DexCom's stock within the investment community.
Competitive Landscape
When compared to its competitors, DexCom holds its own in the Medical Devices & Instruments industry. Edwards Lifesciences Corp (EW, Financial) has a market cap of $55.96 billion, slightly larger than DexCom's. Zimmer Biomet Holdings Inc (ZBH, Financial) and Align Technology Inc (ALGN, Financial) follow with market caps of $26.27 billion and $23.94 billion, respectively. DexCom's strong market position is supported by its innovative product offerings and robust growth metrics.
Conclusion
In summary, DexCom Inc's recent stock performance and modest undervaluation relative to the GF Value indicate potential for further growth. The company's solid profitability and exceptional growth prospects, combined with significant investment from reputable shareholders, position DexCom favorably within the competitive landscape of the medical devices and instruments industry. As DexCom continues to innovate and expand its market share, investors may find the company an attractive option for their portfolios.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
