Dexcom an excellent long term play.
Its time to breakdown an often overlooked name. Here is the breakdown on $DXCM otherwise known as Dexcom.
Current Price: $391.6226
52/Wk High: $456.23
52/Wk Low: $144.78
Read below for the breakdown!
Dexcom is a major medical device company that is mainly focused on glucose monitoring systems otherwise known as CGM systems.
Dexcom’s products are most used within the diabetics sector and given that there is an expected 34.2 million diabetics across the nation, the market is plenty big for growth (fool.com).
Not only that but according to The Motley Fool analysts are expecting an average earnings growth of 55% per year for the next five years (fool.com).
Digging into the financials the last reported quarter was solid. $DXCM delivered a solid Q2 beat with an EPS of $0.79 versus the expected EPS consensus of $0.35.
Not only that but revenue also held steady, coming in at $451.8 million throughout Q2 representing a 34% YOY growth.
Furthermore, the balance sheet is not bad. When last reported Dexcom’s total debt level stood at $1.673 billion but maintained an excellent cash on hand level of $2.509 billion.
Dexcom management added to the Q2 positivity with excellent guidance as well. Management expects 2020 revenues of $1.850 billion representing 25% yearly growth, and a non-GAAP gross profit margin of 65% or more.
Finally, the adjusted EBITDA for full-year 2020 is expected to land around 24% or more according to Dexcom management as of the Q2 earnings report.
Given the expected growth going into the next few years, analysts are extremely bullish on the medical device maker Dexcom.
The average price target currently stands at a high $473.40/share representing a 20.10% gain. Furthermore, the high price target is $540.00/share, representing a 37.00% gain and the low price target is $400.00/share, representing a minimal 1.48% gain.
The big money is just as bullish as the analysts when it comes to Dexcom as well. Currently, 94.00% of $DXCM is owned by institutions. Top holders include Baillie Gifford $ Co., BlackRock Institutional Trust, and The Vanguard Group.
Other notable holders of Dexcom include JP Morgan Asset Management, Morgan Stanley Investment Management, and Sands Capital Management.
When analyzing the stock price itself $DXCM currently trades at a price to earnings ratio of 175.50, a price to sale ratio of 21.39, and a price to book value of 27.02.
The six-month charts also seem to be flashing an opportunity. Currently, the six-month RSI sits at a respectable 41.57, which is not a terrible location to begin a position but as we all know, RSI is not everything.
Furthermore, the six-month MACD sits around -4.95 and is flashing some downward momentum. Finally, the six-month CCI sits at -113 and $DXCM stock currently trades roughly 64 points off its highs.
In short, Dexcom seems to be an excellent long term play with an outstanding growth outlook in the coming years. On the otherhand, in the short term shares could grow cheaper, and therefore if a position is taken I recommend a close stop loss.
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Disclaimer: This is not direct financial advice, simply opinion based on independent research. Luke Donay and Running With The Money are not responsible for any investment made based on the published information.