NASDAQ:DXCM qualifies as a high growth stock and is consolidating.

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 8 for growth:

• The Earnings Per Share has grown by an impressive 25.93% 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 quite strong growth in Revenue. The Revenue has grown by 16.19% in the last year.
• 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.

How do we evaluate the Health for 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:

• DXCM has an Altman-Z score of 5.50. This indicates that DXCM is financially healthy and has little risk of bankruptcy at the moment.
• Looking at the Altman-Z score, with a value of 5.50, DXCM is in the better half of the industry, outperforming 79.68% of the companies in the same industry.
• DXCM has a Debt to FCF ratio of 4.67. This is amongst the best in the industry. DXCM outperforms 82.35% of its industry peers.
• DXCM has a Current Ratio of 2.46. This indicates that DXCM is financially healthy and has no problem in meeting its short term obligations.
• DXCM has a Quick Ratio of 2.12. This indicates that DXCM is financially healthy and has no problem in meeting its short term obligations.

Exploring NASDAQ:DXCM's 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:

• The Return On Assets of DXCM (10.71%) is better than 92.51% of its industry peers.
• DXCM has a Return On Equity of 34.40%. This is amongst the best in the industry. DXCM outperforms 97.86% of its industry peers.
• DXCM has a better Return On Invested Capital (11.41%) than 93.05% of its industry peers.
• The last Return On Invested Capital (11.41%) for DXCM is above the 3 year average (8.57%), which is a sign of increasing profitability.
• DXCM has a Profit Margin of 17.22%. This is amongst the best in the industry. DXCM outperforms 92.51% of its industry peers.
• Looking at the Operating Margin, with a value of 16.30%, DXCM belongs to the top of the industry, outperforming 87.70% of the companies in the same industry.
• With a decent Gross Margin value of 62.10%, DXCM is doing good in the industry, outperforming 63.10% of the companies in the same industry.

How does the Setup look for NASDAQ:DXCM

Next to the Technical Rating, the Setup Rating of a stock determines to which extend the stock is consolidating. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. For NASDAQ:DXCM this score is currently 7:

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. A pullback is taking place, which may present a nice opportunity for an entry. There is a resistance zone just above the current price starting at 73.44. Right above this resistance zone may be a good entry point. We notice that large players showed an interest for DXCM in the last couple of days, which is a good sign.

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

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

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

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.