In the current session, the stock is trading at $124.65, after a 0.66% increase. Over the past month, DexCom Inc. (NASDAQ:DXCM) stock increased by 9.38%, and in the past year, by 20.72%. With performance like this, long-term shareholders are optimistic but others are more likely to look into the price-to-earnings ratio to see if the stock might be overvalued.

Comparing DexCom P/E Against Its Peers

The P/E ratio is used by long-term shareholders to assess the company's market performance against aggregate market data, historical earnings, and the industry at large. A lower P/E could indicate that shareholders do not expect the stock to perform better in the future or it could mean that the company is undervalued.

DexCom has a lower P/E than the aggregate P/E of 287.28 of the Health Care Equipment & Supplies industry. Ideally, one might believe that the stock might perform worse than its peers, but it's also probable that the stock is undervalued.