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DexCom Inc DXCM

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Stock XNAS Rating as of
Today’s Losers
$64.00 −43.85 (40.66%)
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As of Delayed Price Closed
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Company Report

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Dexcom Earnings: Perfect Storm Pulls Down Revenue Growth, Margins, and Our Fair Value Estimate

Debbie S. Wang

Through the confluence of several factors, no-moat Dexcom ran into a wall in the second quarter with disappointing results that significantly lowered its outlook. While we’ve lowered our fair value estimate to $94 per share, down from $105, to reflect operational issues that we suspect will need some time to work out, the market reaction driving shares down over 30% in premarket trading looks like an overreaction to us. This near-term turbulence notwithstanding, underlying demand for continuous glucose monitors, or CGMs, and Dexcom’s reputation for superior accuracy haven’t changed, which leaves us comfortable that the firm can get back on track as it irons out execution issues.

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Price vs Fair Value

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DXCM is trading at a 442% premium.
Price
$64.00
Fair Value
$48.00
Uncertainty
High
1-Star Price
$879.50
5-Star Price
$43.40
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Dexcom's next-gen G7 product should be significantly less expensive, offer a thinner profile, and faster warm-up time than G6.

Bears

Considering Dexcom's sensors are already the most accurate, there's less opportunity for significant improvements on that dimension, compared with key competitors.

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News

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Trading Information

Previous Close Price
$107.85
Day Range
$62.34–67.44
52-Week Range
$62.34–142.00
Bid/Ask
$64.00 / $64.08
Market Cap
$25.45 Bil
Volume/Avg
53.9 Mil / 3.7 Mil

Key Statistics

Price/Earnings (Normalized)
36.57
Price/Sales
6.84
Dividend Yield (Trailing)
—
Dividend Yield (Forward)
—
Total Yield
1.84%

Company Profile

Dexcom designs and commercializes continuous glucose monitoring systems for diabetic patients. CGM systems serve as an alternative to the traditional blood glucose meter process, and the company is evolving its CGM systems to provide integration with insulin pumps from Insulet and Tandem for automatic insulin delivery.
Sector
Healthcare
Industry
Medical Devices
Stock Style Box
Mid Growth
Total Number of Employees
9,600
Website
https://www.dexcom.com

Competitors

Valuation

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Metric
DXCM
MDT
ABT
Price/Earnings (Normalized)
 36.5715.1123.97
Price/Book Value
 10.532.064.72
Price/Sales
 6.843.234.52
Price/Cash Flow
 29.9214.4018.41
Price/Earnings
DXCM
MDT
ABT

Financial Strength

Metric
DXCM
MDT
ABT
Quick Ratio
 2.391.311.11
Current Ratio
 2.822.031.60
Interest Coverage
 35.337.7310.88
Quick Ratio
DXCM
MDT
ABT

Profitability

Metric
DXCM
MDT
ABT
Return on Assets (Normalized)
 10.74%7.64%10.57%
Return on Equity (Normalized)
 31.84%13.51%20.40%
Return on Invested Capital (Normalized)
 12.04%9.78%14.72%
Return on Assets
DXCM
MDT
ABT
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Medical Devices Industry Comparables

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1-Day Chart
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Morningstar Rating for Stocks
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Economic Moat
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EW
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