Is NASDAQ:DXCM on the Verge of a Major Breakout as a Strong Growth Stock?

Last update: May 30, 2024

In this article, we'll take a closer look at DEXCOM INC (NASDAQ:DXCM) as a potential candidate for growth investing. While it's important for investors to conduct their own research, DEXCOM INC has piqued our interest by appearing on our strong growth and breakout radar. Let's explore further.

Growth Insights: NASDAQ:DXCM

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NASDAQ:DXCM has received a 9 out of 10:

The Earnings Per Share has grown by an impressive 72.92% over the past year.
The Earnings Per Share has been growing by 83.54% on average over the past years. This is a very strong growth
Looking at the last year, DXCM shows a very strong growth in Revenue. The Revenue has grown by 25.78%.
DXCM shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 28.56% yearly.
Based on estimates for the next years, DXCM will show a very strong growth in Earnings Per Share. The EPS will grow by 21.67% on average per year.
The Revenue is expected to grow by 17.04% on average over the next years. This is quite good.

Deciphering NASDAQ:DXCM's Health Rating

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NASDAQ:DXCM was assigned a score of 6 for health:

An Altman-Z score of 8.93 indicates that DXCM is not in any danger for bankruptcy at the moment.
DXCM has a better Altman-Z score (8.93) than 85.42% of its industry peers.
With an excellent Debt to FCF ratio value of 4.27, DXCM belongs to the best of the industry, outperforming 83.33% of the companies in the same industry.
DXCM has a Current Ratio of 2.90. This indicates that DXCM is financially healthy and has no problem in meeting its short term obligations.
A Quick Ratio of 2.53 indicates that DXCM has no problem at all paying its short term obligations.

Profitability Assessment of NASDAQ:DXCM

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:

The Return On Assets of DXCM (9.86%) is better than 92.71% of its industry peers.
DXCM has a better Return On Equity (28.45%) than 97.92% of its industry peers.
With an excellent Return On Invested Capital value of 11.18%, DXCM belongs to the best of the industry, outperforming 92.71% of the companies in the same industry.
The 3 year average ROIC (8.57%) for DXCM is below the current ROIC(11.18%), indicating increased profibility in the last year.
The Profit Margin of DXCM (16.82%) is better than 93.23% of its industry peers.
The Operating Margin of DXCM (17.58%) is better than 91.67% of its industry peers.
The Gross Margin of DXCM (63.25%) is better than 60.94% of its industry peers.

Looking at the Setup

In addition to the Technical Rating, ChartMill provides a Setup Rating for each stock. This rating, ranging from 0 to 10, assesses the level of consolidation in the stock based on multiple short-term technical indicators. Currently, NASDAQ:DXCM has a 7 as its setup rating, indicating its current consolidation status.

Although the technical rating is bad, DXCM does present a nice setup opportunity. We see reduced volatility while prices have been consolidating in the most recent period.

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

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

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

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.