We assign a fundamental rating of 7 out of 10 to DXCM. DXCM was compared to 184 industry peers in the Health Care Equipment & Supplies industry. DXCM gets an excellent profitability rating and is at the same time showing great financial health properties. DXCM is not overvalued while it is showing excellent growth. This is an interesting combination. This makes DXCM very considerable for growth and quality investing!

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

DXCM had positive earnings in the past year.
DXCM had a positive operating cash flow in the past year.
In the past 5 years DXCM has always been profitable.
In the past 5 years DXCM always reported a positive cash flow from operatings.

1.2 Ratios

DXCM has a better Return On Assets (9.61%) than 92.93% of its industry peers.
DXCM's Return On Equity of 26.44% is amongst the best of the industry. DXCM outperforms 97.28% of its industry peers.
The Return On Invested Capital of DXCM (15.72%) is better than 95.65% of its industry peers.
DXCM had an Average Return On Invested Capital over the past 3 years of 11.25%. This is above the industry average of 8.81%.
The last Return On Invested Capital (15.72%) for DXCM is above the 3 year average (11.25%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	9.61%
ROE	26.44%
ROIC	15.72%

ROA(3y)7.95%

ROA(5y)8.21%

ROE(3y)23.2%

ROE(5y)22.06%

ROIC(3y)11.25%

ROIC(5y)9.23%

1.3 Margins

DXCM has a Profit Margin of 15.96%. This is amongst the best in the industry. DXCM outperforms 92.93% of its industry peers.
In the last couple of years the Profit Margin of DXCM has grown nicely.
With an excellent Operating Margin value of 18.41%, DXCM belongs to the best of the industry, outperforming 90.22% of the companies in the same industry.
In the last couple of years the Operating Margin of DXCM has grown nicely.
With a decent Gross Margin value of 60.20%, DXCM is doing good in the industry, outperforming 61.41% of the companies in the same industry.
DXCM's Gross Margin has been stable in the last couple of years.

		Industry Rank	Sector Rank
OM	18.41%
PM (TTM)	15.96%
GM	60.2%

OM growth 3Y10.52%

OM growth 5Y8.87%

PM growth 3Y17.27%

PM growth 5Y15.84%

GM growth 3Y-3.98%

GM growth 5Y-0.72%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), DXCM is creating some value.
DXCM has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, DXCM has more shares outstanding
Compared to 1 year ago, DXCM has an improved debt to assets ratio.

2.2 Solvency

DXCM has an Altman-Z score of 5.28. This indicates that DXCM is financially healthy and has little risk of bankruptcy at the moment.
DXCM has a Altman-Z score of 5.28. This is in the better half of the industry: DXCM outperforms 78.26% of its industry peers.
DXCM has a debt to FCF ratio of 2.36. This is a good value and a sign of high solvency as DXCM would need 2.36 years to pay back of all of its debts.
DXCM has a Debt to FCF ratio of 2.36. This is amongst the best in the industry. DXCM outperforms 85.33% of its industry peers.
DXCM has a Debt/Equity ratio of 0.47. This is a healthy value indicating a solid balance between debt and equity.
With a Debt to Equity ratio value of 0.47, DXCM perfoms like the industry average, outperforming 44.02% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	0.47
Debt/FCF	2.36
Altman-Z	5.28

ROIC/WACC1.64

WACC9.59%

2.3 Liquidity

DXCM has a Current Ratio of 1.56. This is a normal value and indicates that DXCM is financially healthy and should not expect problems in meeting its short term obligations.
DXCM has a worse Current ratio (1.56) than 71.20% of its industry peers.
A Quick Ratio of 1.38 indicates that DXCM should not have too much problems paying its short term obligations.
DXCM has a Quick ratio of 1.38. This is comparable to the rest of the industry: DXCM outperforms 40.22% of its industry peers.
The current and quick ratio evaluation for DXCM is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

		Industry Rank	Sector Rank
Current Ratio	1.56
Quick Ratio	1.38

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

DXCM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.41%, which is quite good.
The Earnings Per Share has been growing by 29.25% on average over the past years. This is a very strong growth
Looking at the last year, DXCM shows a quite strong growth in Revenue. The Revenue has grown by 14.21% in the last year.
Measured over the past years, DXCM shows a very strong growth in Revenue. The Revenue has been growing by 22.27% on average per year.

EPS 1Y (TTM)9.41%

EPS 3Y35.38%

EPS 5Y29.25%

EPS Q2Q%35.56%

Revenue 1Y (TTM)14.21%

Revenue growth 3Y18.1%

Revenue growth 5Y22.27%

Sales Q2Q%21.64%

3.2 Future

DXCM is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 22.05% yearly.
Based on estimates for the next years, DXCM will show a quite strong growth in Revenue. The Revenue will grow by 13.28% on average per year.

EPS Next Y27.38%

EPS Next 2Y23.51%

EPS Next 3Y22.59%

EPS Next 5Y22.05%

Revenue Next Year15.45%

Revenue Next 2Y14.08%

Revenue Next 3Y13.66%

Revenue Next 5Y13.28%

3.3 Evolution

Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 39.61, DXCM can be considered very expensive at the moment.
Based on the Price/Earnings ratio, DXCM is valued a bit cheaper than the industry average as 70.65% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 28.82, DXCM is valued a bit more expensive.
A Price/Forward Earnings ratio of 29.27 indicates a quite expensive valuation of DXCM.
Compared to the rest of the industry, the Price/Forward Earnings ratio of DXCM indicates a somewhat cheap valuation: DXCM is cheaper than 72.28% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 25.95. DXCM is around the same levels.

		Industry Rank	Sector Rank
PE	39.61
Fwd PE	29.27

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, DXCM is valued a bit cheaper than the industry average as 73.37% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of DXCM indicates a rather cheap valuation: DXCM is cheaper than 82.61% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	27.06
EV/EBITDA	24.57

4.3 Compensation for Growth

The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
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 22.59% in the coming years.