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

In this article we will dive into DEXCOM INC (NASDAQ:DXCM) as a possible candidate for growth investing. Investors should always do their own research, but we noticed DEXCOM INC showing up in our strong growth, ready to breakout screen, which makes it worth to investigate a bit more.

Understanding NASDAQ:DXCM's Growth Score

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NASDAQ:DXCM boasts a 8 out of 10:

• 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.
• DXCM shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 16.19%.
• The Revenue has been growing by 28.56% on average over the past years. This is a very strong growth!
• 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.
• The Revenue is expected to grow by 14.25% on average over the next years. This is quite good.

How do we evaluate the Health for NASDAQ:DXCM?

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NASDAQ:DXCM has earned a 6 out of 10:

• An Altman-Z score of 6.06 indicates that DXCM is not in any danger for bankruptcy at the moment.
• The Altman-Z score of DXCM (6.06) is better than 82.01% of its industry peers.
• The Debt to FCF ratio of DXCM (4.67) is better than 81.48% 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.
• A Quick Ratio of 2.12 indicates that DXCM has no problem at all paying its short term obligations.

A Closer Look at Profitability for NASDAQ:DXCM

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NASDAQ:DXCM has achieved a 8:

• DXCM has a better Return On Assets (10.71%) than 92.06% of its industry peers.
• With an excellent Return On Equity value of 34.40%, DXCM belongs to the best of the industry, outperforming 97.88% of the companies in the same industry.
• DXCM's Return On Invested Capital of 11.41% is amongst the best of the industry. DXCM outperforms 93.12% of its industry peers.
• The 3 year average ROIC (8.57%) for DXCM is below the current ROIC(11.41%), indicating increased profibility in the last year.
• DXCM has a Profit Margin of 17.22%. This is amongst the best in the industry. DXCM outperforms 92.06% of its industry peers.
• Looking at the Operating Margin, with a value of 16.30%, DXCM belongs to the top of the industry, outperforming 88.36% of the companies in the same industry.
• DXCM has a better Gross Margin (62.10%) than 64.02% of its industry peers.

How does the Setup look for NASDAQ:DXCM

Besides the Technical Rating, ChartMill assigns a Setup Rating to every stock to determine the degree of consolidation. This rating, ranging from 0 to 10, is updated daily and evaluates various short-term technical indicators. NASDAQ:DXCM currently holds a 9 as its setup rating, suggesting a particular level of consolidation in the stock.

Although the technical rating is only medium, DXCM does present a nice setup opportunity. Prices have been consolidating lately. There is a resistance zone just above the current price starting at 81.01. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 79.38, a Stop Loss order could be placed below this zone. We notice that large players showed an interest for DXCM in the last couple of days, which is a good sign. Very recently a Pocket Pivot signal was observed. This is another positive 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.

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

Disclaimer

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.