NASDAQ:DXCM: a strong growth stock preparing for the next leg up?.

Groth investors are looking for stocks showing high revenue and EPS growth. We will have a look here to see if DEXCOM INC (NASDAQ:DXCM) is suited for growth investing, while it is forming a base and may be ready to breakout. Investors should of course do their own research, but we spotted DEXCOM INC showing up in our growth with base formation screen, so it may be worth spending some more time on it.

Looking at the 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:

• DXCM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 72.92%, which is quite impressive.
• DXCM shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 83.54% yearly.
• The Revenue has grown by 25.78% in the past year. This is a very strong growth!
• DXCM shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 28.56% yearly.
• The Earnings Per Share is expected to grow by 21.67% on average over the next years. This is a very strong growth
• DXCM is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 17.04% yearly.

Understanding NASDAQ:DXCM's Health

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NASDAQ:DXCM scores a 6 out of 10:

• DXCM has an Altman-Z score of 8.16. This indicates that DXCM is financially healthy and has little risk of bankruptcy at the moment.
• DXCM has a better Altman-Z score (8.16) than 83.96% of its industry peers.
• The Debt to FCF ratio of DXCM (4.27) is better than 82.89% of its industry peers.
• A Current Ratio of 2.90 indicates that DXCM has no problem at all paying its short term obligations.
• A Quick Ratio of 2.53 indicates that DXCM has no problem at all paying its short term obligations.

Looking at the Profitability

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NASDAQ:DXCM has earned a 8 out of 10:

• The Return On Assets of DXCM (9.86%) is better than 92.51% of its industry peers.
• The Return On Equity of DXCM (28.45%) is better than 97.33% of its industry peers.
• Looking at the Return On Invested Capital, with a value of 11.18%, DXCM belongs to the top of the industry, outperforming 92.51% 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.
• DXCM has a better Profit Margin (16.82%) than 93.58% of its industry peers.
• With an excellent Operating Margin value of 17.58%, DXCM belongs to the best of the industry, outperforming 91.98% of the companies in the same industry.
• With a decent Gross Margin value of 63.25%, DXCM is doing good in the industry, outperforming 62.03% of the companies in the same industry.

How do we evaluate the setup for NASDAQ:DXCM?

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 8 as its setup rating, indicating its current consolidation status.

DXCM has a bad technical rating, but it does show a decent setup pattern. Prices have been consolidating lately. There is a support zone below the current price at 113.38, a Stop Loss order could be placed below this zone.

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

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

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

Disclaimer

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.