Don't overlook NASDAQ:DXCM—a stock with solid growth prospects and a reasonable valuation.

Last update: Jan 23, 2024

Take a closer look at DEXCOM INC (NASDAQ:DXCM), an affordable growth stock uncovered by our stock screener. NASDAQ:DXCM boasts strong growth prospects and excels in financial health indicators, all while maintaining a reasonable valuation. Let's break it down further.

Growth Assessment of 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:

The Earnings Per Share has grown by an impressive 92.86% over the past year.
The Earnings Per Share has been growing by 23.89% on average over the past years. This is a very strong growth
DXCM shows a strong growth in Revenue. In the last year, 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
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.

Evaluating Valuation: NASDAQ:DXCM

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NASDAQ:DXCM has earned a 5 for valuation:

Based on the Price/Earnings ratio, DXCM is valued a bit cheaper than the industry average as 69.70% of the companies are valued more expensively.
DXCM's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. DXCM is cheaper than 72.22% of the companies in the same industry.
68.69% of the companies in the same industry are more expensive than DXCM, based on the Enterprise Value to EBITDA ratio.
77.78% of the companies in the same industry are more expensive than DXCM, based on the Price/Free Cash Flow ratio.
DXCM has an outstanding profitability rating, which 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.

Health Assessment of NASDAQ:DXCM

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NASDAQ:DXCM, the assigned 6 reflects its health status:

DXCM has an Altman-Z score of 8.41. This indicates that DXCM is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of DXCM (8.41) is better than 89.39% of its industry peers.
DXCM has a Debt to FCF ratio of 5.23. This is amongst the best in the industry. DXCM outperforms 83.84% of its industry peers.
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.

What does the Profitability looks like for NASDAQ:DXCM

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NASDAQ:DXCM, the assigned 8 is a significant indicator of profitability:

DXCM has a Return On Assets of 5.72%. This is amongst the best in the industry. DXCM outperforms 85.35% 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 92.93% of the companies in the same industry.
DXCM has a better Return On Invested Capital (9.08%) than 90.40% 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.
DXCM has a Profit Margin of 11.08%. This is amongst the best in the industry. DXCM outperforms 88.89% of its industry peers.
In the last couple of years the Profit Margin of DXCM has grown nicely.
DXCM's Operating Margin of 15.28% is amongst the best of the industry. DXCM outperforms 87.88% of its industry peers.
In the last couple of years the Operating Margin of DXCM has grown nicely.
DXCM has a better Gross Margin (64.28%) than 67.68% of its industry peers.

Every day, new Affordable Growth stocks can be found on ChartMill in our Affordable Growth screener.

Our latest full fundamental report of DXCM contains the most current fundamental analsysis.

Keep in mind

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.