Over the last six months, DexCom’s shares have sunk to $80.25, producing a disappointing 9.9% loss - a stark contrast to the S&P 500’s 5.8% gain. This may have investors wondering how to approach the situation.

Following the drawdown, is now an opportune time to buy DXCM? Find out in our full research report, it’s free.

Why Is DXCM a Good Business?

Founded in 1999 and receiving its first FDA approval in 2006, DexCom (NASDAQ: DXCM) develops and sells continuous glucose monitoring systems that allow people with diabetes to track their blood sugar levels without repeated finger pricks.

1. Core Business Firing on All Cylinders

In addition to reported revenue, organic revenue is a useful data point for analyzing Patient Monitoring companies. This metric gives visibility into DexCom’s core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement.

Over the last two years, DexCom’s organic revenue averaged 17.8% year-on-year growth. This performance was fantastic and shows it can expand quickly without relying on expensive (and risky) acquisitions.

2. Outstanding Long-Term EPS Growth

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

DexCom’s EPS grew at an astounding 17.5% compounded annual growth rate over the last five years. This performance was better than most healthcare businesses.

3. Increasing Free Cash Flow Margin Juices Financials

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

As you can see below, DexCom’s margin expanded by 8.6 percentage points over the last five years. This is encouraging, and we can see it became a less capital-intensive business because its free cash flow profitability rose more than its operating profitability. DexCom’s free cash flow margin for the trailing 12 months was 13.3%.

Final Judgment

These are just a few reasons DexCom is a rock-solid business worth owning. With the recent decline, the stock trades at 34.3× forward P/E (or $80.25 per share). Is now a good time to buy? See for yourself in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.