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Is DXCM a good stock to buy? We came across a bullish thesis on DexCom, Inc. on Part-Time Compounder’s Substack by Francesco Ferrari. In this article, we will summarize the bulls’ thesis on DXCM. DexCom, Inc.'s share was trading at $64.62 as of April 20th. DXCM’s trailing and forward P/E were 30.92 and 25.91, respectively according to Yahoo Finance.

DexCom, Inc., a medical device company, focuses on the design, development, and commercialization of continuous glucose monitoring (CGM) systems for the management of diabetes and metabolic health in the United States and internationally.

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DXCM has become an overlooked opportunity in the healthcare technology space, specializing in continuous glucose monitors (CGMs) that track blood sugar every few minutes without finger sticks. Historically focused on Type 1 and insulin-intensive Type 2 diabetics, DexCom derives the majority of its revenue from recurring sales of disposable sensors and transmitters, primarily distributed through pharmacies and medical equipment providers.

These consumables, which need replacing every couple of weeks, provide a highly recurring revenue stream, supporting strong U.S. and international growth. The company has consistently expanded its top line while maintaining a return on invested capital above 30%, demonstrating both operational efficiency and scalable growth.

Forward-looking analysis shows a compelling risk/reward setup. DexCom’s revenue growth over the past three years has averaged 17.4% annually, and projections suggest 15.2% growth going forward, aligning with targets to achieve a 15% annual return in a reverse DCF framework. Several catalysts support this trajectory: the Stelo over-the-counter CGM, launched in 2024, opens a new U.S. addressable market of roughly 25 million adults not using insulin.

The upcoming G7 15-day sensor is expected to increase gross margins to 63-64% while improving user retention, and broader coverage through pharmacy benefit managers and anticipated Medicare expansion could add millions of insured lives. Internationally, DexCom is aggressively penetrating Western Europe, Japan, and Australia to capture double-digit growth against competitors like Abbott.

Additionally, the anticipated G8 sensor underscores DexCom’s continued technological leadership. With recurring revenues, expanding markets, innovation, and operational strength, DexCom presents a compelling investment with significant upside potential for both equity and health-tech-focused investors.

Previously, we covered a bullish thesis on DexCom, Inc. (DXCM) by Na’s Substack in May 2025, which highlighted its leadership in continuous glucose monitoring, recurring revenue from disposable sensors, Stelo OTC expansion, and the G7 15-day sensor. DXCM’s stock price has depreciated by approximately 20.74% since our coverage. Francesco Ferrari shares a similar view but emphasizes the risk/reward setup and international growth with G8 as key catalysts.

DexCom, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 71 hedge fund portfolios held DXCM at the end of the fourth quarter which was 71 in the previous quarter. While we acknowledge the risk and potential of DXCM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than DXCM and that has 10,000% upside potential, check out our report about this cheapest AI stock.

Disclosure: None.