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

Exploring Growth Potential: DEXCOM INC (NASDAQ:DXCM) and Its Base Formation. Growth investors seek promising revenue and EPS growth, and DEXCOM INC has come under our scrutiny for potential growth investing. While it's crucial to do your own research, we've detected DEXCOM INC on our screen for growth with base formation, suggesting it merits a closer look.

Assessing Growth for 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 8 for growth:

• DXCM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 25.93%, 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 16.19% in the past year. This is quite good.
• Measured over the past years, DXCM shows a very strong growth in Revenue. The Revenue has been growing by 28.56% on average per year.
• DXCM is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 18.56% yearly.
• Based on estimates for the next years, DXCM will show a quite strong growth in Revenue. The Revenue will grow by 14.25% on average per year.

A Closer Look at Health for 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:

• An Altman-Z score of 6.05 indicates that DXCM is not in any danger for bankruptcy at the moment.
• With an excellent Altman-Z score value of 6.05, DXCM belongs to the best of the industry, outperforming 82.35% 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 81.82% of its industry peers.
• A Current Ratio of 2.46 indicates that DXCM has no problem at all paying 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.

Analyzing Profitability Metrics

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:

• DXCM has a Return On Assets of 10.71%. This is amongst the best in the industry. DXCM outperforms 91.98% of its industry peers.
• DXCM's Return On Equity of 34.40% is amongst the best of the industry. DXCM outperforms 97.86% of its industry peers.
• With an excellent Return On Invested Capital value of 11.41%, DXCM belongs to the best of the industry, outperforming 93.05% of the companies in the same industry.
• The 3 year average ROIC (8.57%) for DXCM is below the current ROIC(11.41%), indicating increased profibility in the last year.
• Looking at the Profit Margin, with a value of 17.22%, DXCM belongs to the top of the industry, outperforming 91.98% of the companies in the same industry.
• DXCM's Operating Margin of 16.30% is amongst the best of the industry. DXCM outperforms 88.24% of its industry peers.
• With a decent Gross Margin value of 62.10%, DXCM is doing good in the industry, outperforming 63.64% 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 extent of consolidation in the stock based on multiple short-term technical indicators. Currently, NASDAQ:DXCM has a 8 as its setup rating:

Although the technical rating is only medium, DXCM does present a nice setup opportunity. Prices have been consolidating lately and the volatility has been reduced. There is a resistance zone just above the current price starting at 80.25. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 76.80, a Stop Loss order could be placed below this zone.

More Strong Growth stocks can be found 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 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.