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DXCM — Dexcom

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2. Company Fundamentals

2.1 Competitiveness

Metric Value
Operating Margins 21.42%
Profit Margins 19.31%
Return on Equity 35.62%
Return on Assets 9.65%
Free Float 0.38B
Short Int % Utilisation 5.19%

2.2 Growth

Metric Value
Revenue Growth 15.0%
Free Cash Flow 1.06B
EBITDA 21.53 (Ratio)
Enterprise Value 27.82B
EV/Revenue 5.78
EV/EBITDA 21.53

Revenue growth of 15.0% indicates steady, moderate expansion.

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* 21.45%
Risk / Std Dev (Ann.)* 42.39%
1-Year Price Return* 10.87%

Latest Market Data (as of 2026-08-14, US Eastern time):

Metric Value
Last Price $89.75
52-Week Range $54.11 – $91.93
Observation Count 251 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

DuPont Model Analysis

The DuPont model decomposes return on equity (ROE) into three operating and capital-structure drivers:

ROE = Net Margin × Asset Turnover × Equity Multiplier

The comparison uses the latest two comparable annual periods available for the issuer, with reported statement amounts shown in US$. Revenue and net income are income-statement flows; total assets and shareholders’ equity are year-end balance-sheet figures. This is a simplified year-end-balance DuPont comparison rather than an average-balance ROE calculation.

DuPont component Calculation FY2025 FY2024
Revenue Reported revenue $4.66B $4.03B
Net income Reported net income $836.30M $576.20M
Total assets Year-end reported balance $6.34B $6.48B
Shareholders’ equity Year-end reported balance $2.75B $2.10B
Net margin Net income ÷ revenue 17.94% 14.29%
Asset turnover Revenue ÷ total assets 0.7353x 0.6219x
Equity multiplier Total assets ÷ shareholders’ equity 2.3088x 3.0840x
ROE Net margin × asset turnover × equity multiplier 30.46% 27.40%

Source: Yahoo Finance annual statements. Values are based on the two latest comparable annual periods returned by the source; fiscal period labels use the statement period-end year.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue $4.66B
Prior annual revenue $4.03B
EBIT $1.11B
Tax rate 23.20%
NOPAT = EBIT × (1 − tax rate) $849.95M
Forecast start-growth basis 15.00%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT $849.95M
Add: depreciation & amortisation $251.80M
Less: capital expenditure -$363.50M
Less/(add): working-capital cash-flow movement $103.40M
Current unlevered FCFF $841.65M

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 15.00% $977.44M $289.57M -$418.02M $118.91M $967.89M $914.54M
2 11.88% $1.09B $323.96M -$431.74M $133.03M $1.12B $943.78M
3 8.75% $1.19B $352.30M -$430.44M $144.67M $1.26B $945.76M
4 5.62% $1.26B $372.12M -$413.39M $152.81M $1.37B $919.63M
5 2.50% $1.29B $381.42M -$381.42M $156.63M $1.44B $866.97M

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 1.41
Cost of equity 12.47%
Pre-tax cost of debt 0.92%
WACC 12.01%
WACC validation within standard range

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value $15.57B
Implied terminal EV / EBITDA 7.57x
Terminal value as % of enterprise value 65.80%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF $4.59B
Present value of terminal value $8.83B
Indicated enterprise value $13.42B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value $13.42B
Less: gross interest-bearing debt $1.39B
Add: cash and equivalents $917.70M
Add: affiliate investments $0.00
Less: minority interests $0.00
Indicated common equity value $12.95B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 405,500,000.00
Share-count basis reported diluted weighted-average shares
Current market price $90.41
DCF indicative value per share $31.94
Indicative value vs. market price -64.67%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range pass
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration within review band
Implied price differs from spot by more than 30% review required

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 4/4 evidenced checks
Lynch-inspired balance-and-growth checks 4/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 17:31:01.790798 UTC; latest reported fiscal period: 2025-12-31 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

2.7 Quantitative Factor Diagnostics

Model basis: Daily issuer USD excess returns are regressed in-sample using ordinary least squares on matching regional Fama–French factors. FF3 estimates market, size, and value loadings; FF5 adds profitability and investment. Coefficients are descriptive historical exposures, not predictions.

Estimation input Value
Regional factor set US
Factor-return currency USD
Issuer-return basis USD adjusted total return
Estimation window 2025-08-19 to 2026-06-30
Aligned daily observations 217
Minimum observation requirement 120
Currency conversion for HK listings not required

Fama–French Three-Factor and Five-Factor Results

Diagnostic FF3 FF5
Annualised alpha -28.14% -19.39%
Adjusted R² 0.08 0.09
Annualised residual volatility 38.73% 38.41%
Factor loading (t-statistic) FF3 FF5
Market excess return (Mkt-RF) 0.61 (2.69) 0.85 (3.28)
Size (SMB) 0.80 (2.60) 0.85 (2.57)
Value (HML) -0.01 (-0.05) -0.21 (-0.65)
Profitability (RMW) NM 0.46 (1.68)
Investment (CMA) NM 0.24 (0.51)

Definitions: Mkt-RF is the market return less the risk-free rate; SMB is small minus big; HML is high minus low book-to-market; RMW is robust minus weak profitability; CMA is conservative minus aggressive investment. Factor returns are sourced from the Kenneth R. French Data Library; issuer adjusted-return history is sourced from Yahoo Finance. For Hong Kong listings, adjusted HKD prices are converted into USD with daily USD/HKD closes before return calculation to match the USD regional factor basis. This is an in-sample historical regression; coefficients and t-statistics do not establish causation or predict future returns. This is research and analysis only, not personalized financial advice.

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