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Shareholders Are Raving About How The DexCom (NASDAQ:DXCM) Share Price Increased 479%

Simply Wall St
·3 mins read

For us, stock picking is in large part the hunt for the truly magnificent stocks. Not every pick can be a winner, but when you pick the right stock, you can win big. One such superstar is DexCom, Inc. (NASDAQ:DXCM), which saw its share price soar 479% in three years. It's also good to see the share price up 13% over the last quarter. But this could be related to the strong market, which is up 13% in the last three months.

Check out our latest analysis for DexCom

Given that DexCom only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

DexCom's revenue trended up 34% each year over three years. That's much better than most loss-making companies. In light of this attractive revenue growth, it seems somewhat appropriate that the share price has been rocketing, boasting a gain of 80% per year, over the same period. Despite the strong run, top performers like DexCom have been known to go on winning for decades. So we'd recommend you take a closer look at this one, or even put it on your watchlist.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

earnings-and-revenue-growth
earnings-and-revenue-growth

DexCom is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. So it makes a lot of sense to check out what analysts think DexCom will earn in the future (free analyst consensus estimates)

A Different Perspective

It's good to see that DexCom has rewarded shareholders with a total shareholder return of 157% in the last twelve months. That gain is better than the annual TSR over five years, which is 33%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand DexCom better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with DexCom .

We will like DexCom better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.