NASDAQ:DXCM is showing decent growth, but is still valued reasonably.

Last update: Dec 11, 2023

Our stock screener has spotted DEXCOM INC (NASDAQ:DXCM) as a growth stock which is not overvalued. NASDAQ:DXCM is scoring great on several growth aspects while it also shows decent health and profitability. At the same time it remains remains attractively priced. We'll dive into each aspect below.

Evaluating Growth: NASDAQ:DXCM

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NASDAQ:DXCM was assigned a score of 9 for growth:

DXCM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 92.86%, which is quite impressive.
Measured over the past years, DXCM shows a very strong growth in Earnings Per Share. The EPS has been growing by 23.89% on average per year.
Looking at the last year, DXCM shows a very strong growth in Revenue. The Revenue has grown by 21.85%.
DXCM shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 32.28% yearly.
The Earnings Per Share is expected to grow by 35.04% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 19.72% on average over the next years. This is quite good.
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.

Valuation Examination for NASDAQ:DXCM

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NASDAQ:DXCM boasts a 5 out of 10:

70.30% of the companies in the same industry are more expensive than DXCM, based on the Price/Earnings ratio.
Based on the Price/Forward Earnings ratio, DXCM is valued a bit cheaper than the industry average as 72.77% of the companies are valued more expensively.
Based on the Enterprise Value to EBITDA ratio, DXCM is valued a bit cheaper than 69.31% of the companies in the same industry.
78.22% of the companies in the same industry are more expensive than DXCM, based on the Price/Free Cash Flow ratio.
The excellent profitability rating of DXCM may justify a higher PE ratio.
A more expensive valuation may be justified as DXCM's earnings are expected to grow with 36.20% in the coming years.

Deciphering NASDAQ:DXCM's Health Rating

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NASDAQ:DXCM has earned a 6 out of 10:

An Altman-Z score of 7.75 indicates that DXCM is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 7.75, DXCM belongs to the top of the industry, outperforming 88.12% of the companies in the same industry.
Looking at the Debt to FCF ratio, with a value of 5.23, DXCM belongs to the top of the industry, outperforming 84.16% of the companies in the same industry.
A Current Ratio of 2.80 indicates that DXCM has no problem at all paying its short term obligations.
DXCM has a Quick Ratio of 2.50. This indicates that DXCM is financially healthy and has no problem in meeting its short term obligations.

Looking at the Profitability

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NASDAQ:DXCM was assigned a score of 8 for profitability:

DXCM has a Return On Assets of 5.72%. This is amongst the best in the industry. DXCM outperforms 86.14% of its industry peers.
The Return On Equity of DXCM (16.62%) is better than 93.07% of its industry peers.
DXCM has a Return On Invested Capital of 9.08%. This is amongst the best in the industry. DXCM outperforms 91.09% of its industry peers.
The last Return On Invested Capital (9.08%) for DXCM is above the 3 year average (7.78%), which is a sign of increasing profitability.
The Profit Margin of DXCM (11.08%) is better than 89.11% of its industry peers.
In the last couple of years the Profit Margin of DXCM has grown nicely.
The Operating Margin of DXCM (15.28%) is better than 88.12% of its industry peers.
DXCM's Operating Margin has improved in the last couple of years.
DXCM has a Gross Margin of 64.28%. This is in the better half of the industry: DXCM outperforms 67.82% of its industry peers.

More Affordable Growth stocks can be found in our Affordable Growth screener.

For an up to date full fundamental analysis you can check the fundamental report of DXCM

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.