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

For growth-minded investors, high revenue and EPS growth are key criteria. Today, we'll examine whether DEXCOM INC (NASDAQ:DXCM) fits the bill for growth investing, particularly as it forms a base and hints at a potential breakout. Remember, due diligence is essential, but DEXCOM INC has caught our attention on our screen for growth with base formation. It may warrant additional investigation.

Growth Analysis for NASDAQ:DXCM

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NASDAQ:DXCM, the assigned 8 reflects its growth potential:

• 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.
• The Revenue has grown by 16.19% in the past year. This is quite good.
• 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 19.52% on average over the next years. This is quite good.
• The Revenue is expected to grow by 14.26% on average over the next years. This is quite good.

Evaluating Health: 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:

• DXCM has an Altman-Z score of 6.47. This indicates that DXCM is financially healthy and has little risk of bankruptcy at the moment.
• DXCM has a better Altman-Z score (6.47) than 83.51% of its industry peers.
• With an excellent Debt to FCF ratio value of 4.67, DXCM belongs to the best of the industry, outperforming 80.32% of the companies in the same industry.
• 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

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 Return On Assets of 10.71%. This is amongst the best in the industry. DXCM outperforms 91.49% of its industry peers.
• Looking at the Return On Equity, with a value of 34.40%, DXCM belongs to the top of the industry, outperforming 97.87% of the companies in the same industry.
• The Return On Invested Capital of DXCM (11.41%) is better than 92.55% 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 better Profit Margin (17.22%) than 92.02% of its industry peers.
• DXCM's Operating Margin of 16.30% is amongst the best of the industry. DXCM outperforms 87.77% of its industry peers.
• The Gross Margin of DXCM (62.10%) is better than 63.83% of its industry peers.

How do we evaluate the setup for NASDAQ:DXCM?

Besides the Technical Rating, ChartMill also assign a Setup Rating to every stock. This setup score also ranges from 0 to 10 and determines to which extend the stock is consolidating. This is achieved by evaluating multiple short term technical indicators. NASDAQ:DXCM currently has a 7 as setup rating:

Besides having an excellent technical rating, DXCM also presents a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. There is a resistance zone just above the current price starting at 88.75. Right above this resistance zone may be a good entry point.

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

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

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

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.