In the current session, the stock is trading at $127.65, after a 0.50% increase. Over the past month, DexCom Inc. (NASDAQ:DXCM) stock increased by 6.75%, and in the past year, by 55.82%. 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.

Evaluating DexCom P/E in Comparison to 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 better P/E ratio of 178.9 than the aggregate P/E ratio of 153.77 of the Health Care Equipment & Supplies industry. Ideally, one might believe that DexCom Inc. might perform better in the future than it's industry group, but it's probable that the stock is overvalued.