For those who appreciate growth without the sticker shock, NASDAQ:DXCM is worth considering.

Last update: Jan 2, 2024

DEXCOM INC (NASDAQ:DXCM) has caught the eye of our stock screener as an affordable growth stock. NASDAQ:DXCM is displaying robust growth metrics and also excels in terms of profitability, solvency, and liquidity. Additionally, it appears to be reasonably priced. Let's delve into the details.

Understanding NASDAQ:DXCM's Growth

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:

The Earnings Per Share has grown by an impressive 92.86% over the past year.
DXCM shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 23.89% yearly.
DXCM shows a strong growth in Revenue. In the last year, the Revenue has grown by 21.85%.
The Revenue has been growing by 32.28% on average over the past years. This is a very strong growth!
Based on estimates for the next years, DXCM will show a very strong growth in Earnings Per Share. The EPS will grow by 35.04% on average per year.
Based on estimates for the next years, DXCM will show a quite strong growth in Revenue. The Revenue will grow by 19.72% on average per year.
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Valuation Analysis 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:

Based on the Price/Earnings ratio, DXCM is valued a bit cheaper than the industry average as 70.65% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Forward Earnings ratio of DXCM indicates a somewhat cheap valuation: DXCM is cheaper than 72.64% of the companies listed in the same industry.
69.15% of the companies in the same industry are more expensive than DXCM, based on the Enterprise Value to EBITDA ratio.
DXCM's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. DXCM is cheaper than 78.11% of the companies in the same industry.
DXCM has an outstanding profitability rating, which may justify a higher PE ratio.
DXCM's earnings are expected to grow with 36.20% in the coming years. This may justify a more expensive valuation.

Evaluating Health: NASDAQ:DXCM

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:

DXCM has an Altman-Z score of 8.13. This indicates that DXCM is financially healthy and has little risk of bankruptcy at the moment.
DXCM has a Altman-Z score of 8.13. This is amongst the best in the industry. DXCM outperforms 87.56% of its industry peers.
With an excellent Debt to FCF ratio value of 5.23, DXCM belongs to the best of the industry, outperforming 84.08% 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.
A Quick Ratio of 2.50 indicates that DXCM has no problem at all paying its short term obligations.

Understanding NASDAQ:DXCM's Profitability

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NASDAQ:DXCM scores a 8 out of 10:

DXCM has a Return On Assets of 5.72%. This is amongst the best in the industry. DXCM outperforms 85.57% of its industry peers.
Looking at the Return On Equity, with a value of 16.62%, DXCM belongs to the top of the industry, outperforming 93.03% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 9.08%, DXCM belongs to the top of the industry, outperforming 90.55% of the companies in the same industry.
The 3 year average ROIC (7.78%) for DXCM is below the current ROIC(9.08%), indicating increased profibility in the last year.
The Profit Margin of DXCM (11.08%) is better than 89.05% of its industry peers.
DXCM's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 15.28%, DXCM belongs to the top of the industry, outperforming 88.06% of the companies in the same industry.
In the last couple of years the Operating Margin of DXCM has grown nicely.
With a decent Gross Margin value of 64.28%, DXCM is doing good in the industry, outperforming 67.66% of the companies in the same industry.

Our Affordable Growth screener lists more Affordable Growth stocks and is updated daily.

Check the latest full fundamental report of DXCM for a complete fundamental analysis.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.