Despite its growth, NASDAQ:DXCM remains within the realm of affordability.

Here's DEXCOM INC (NASDAQ:DXCM) for you, a growth stock our stock screener believes is undervalued. NASDAQ:DXCM is scoring impressively in terms of growth while demonstrating strong financials. On top of that, it remains attractively priced. Let's break it down further.

ChartMill's Evaluation of 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 54.87% over the past year.
• Measured over the past years, DXCM shows a very strong growth in Earnings Per Share. The EPS has been growing by 83.54% on average per year.
• Looking at the last year, DXCM shows a very strong growth in Revenue. The Revenue has grown by 23.05%.
• The Revenue has been growing by 28.56% on average over the past years. This is a very strong growth!
• The Earnings Per Share is expected to grow by 21.67% on average over the next years. This is a very strong growth
• The Revenue is expected to grow by 17.04% on average over the next years. This is quite good.

Valuation Assessment of NASDAQ:DXCM

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NASDAQ:DXCM was assigned a score of 5 for valuation:

• DXCM's Price/Earnings ratio is a bit cheaper when compared to the industry. DXCM is cheaper than 72.77% of the companies in the same industry.
• 74.87% of the companies in the same industry are more expensive than DXCM, based on the Price/Forward Earnings ratio.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of DXCM indicates a somewhat cheap valuation: DXCM is cheaper than 72.25% of the companies listed in the same industry.
• Compared to the rest of the industry, the Price/Free Cash Flow ratio of DXCM indicates a rather cheap valuation: DXCM is cheaper than 82.72% of the companies listed in the same industry.
• 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 23.39% in the coming years.

Health Assessment of NASDAQ:DXCM

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:

• An Altman-Z score of 5.24 indicates that DXCM is not in any danger for bankruptcy at the moment.
• With a decent Altman-Z score value of 5.24, DXCM is doing good in the industry, outperforming 78.01% of the companies in the same industry.
• The Debt to FCF ratio of DXCM is 3.75, which is a good value as it means it would take DXCM, 3.75 years of fcf income to pay off all of its debts.
• Looking at the Debt to FCF ratio, with a value of 3.75, DXCM belongs to the top of the industry, outperforming 83.25% of the companies in the same industry.
• A Current Ratio of 2.82 indicates that DXCM has no problem at all paying its short term obligations.
• DXCM has a Quick Ratio of 2.48. This indicates that DXCM is financially healthy and has no problem in meeting its short term obligations.

Looking at the Profitability

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:DXCM, the assigned 8 is noteworthy for profitability:

• DXCM has a better Return On Assets (9.81%) than 92.15% of its industry peers.
• DXCM has a better Return On Equity (27.40%) than 96.34% of its industry peers.
• With an excellent Return On Invested Capital value of 11.24%, DXCM belongs to the best of the industry, outperforming 92.15% of the companies in the same industry.
• The last Return On Invested Capital (11.24%) for DXCM is above the 3 year average (8.57%), which is a sign of increasing profitability.
• DXCM has a better Profit Margin (16.95%) than 93.72% of its industry peers.
• The Operating Margin of DXCM (17.74%) is better than 91.62% of its industry peers.
• With a decent Gross Margin value of 63.16%, DXCM is doing good in the industry, outperforming 62.83% of the companies in the same industry.

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

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

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.