Analyzing DexCom In Comparison To Competitors In Health Care Equipment & Supplies Industry

In today's fast-paced and highly competitive business world, it is crucial for investors and industry followers to conduct comprehensive company evaluations. In this article, we will delve into an extensive industry comparison, evaluating DexCom DXCM in relation to its major competitors in the Health Care Equipment & Supplies industry. By closely examining key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and highlight company's performance in the industry.

DexCom Background

Dexcom designs and commercializes continuous glucose monitoring systems for diabetic patients. CGM systems serve as an alternative to the traditional blood glucose meter process, and the company is evolving its CGM systems to provide integration with insulin pumps from Insulet and Tandem for automatic insulin delivery.

Company P/E P/B P/S ROE EBITDA (in billions) Gross Profit (in billions) Revenue Growth
DexCom Inc 97.62 15.13 11.17 5.53% $0.29 $0.62 26.69%
Stryker Corp 38.17 5.91 5.32 4.31% $1.23 $3.18 11.2%
Medtronic PLC 26.04 1.83 2.98 1.54% $2.02 $5.07 4.49%
Becton Dickinson & Co 45.71 2.83 3.80 1.52% $1.16 $2.1 5.11%
Edwards Lifesciences Corp 27.23 5.80 6.70 5.91% $0.46 $1.13 12.27%
IDEXX Laboratories Inc 42.35 30.31 9.54 23.18% $0.32 $0.57 9.65%
GE HealthCare Technologies Inc 18.43 4.26 1.59 6.06% $0.86 $1.94 7.43%
Zimmer Biomet Holdings Inc 43.50 1.76 3.05 1.71% $0.57 $1.34 4.93%
ResMed Inc 22.96 4.89 4.76 5.24% $0.34 $0.6 16.0%
Steris PLC 173.54 3.36 4.12 2.02% $0.33 $0.57 11.07%
Hologic Inc 33.93 3.13 4.10 -0.77% $0.12 $0.37 -1.83%
Insulet Corp 147.19 16.70 6.36 5.17% $0.06 $0.26 32.43%
Teleflex Inc 23.69 2.06 3.01 2.67% $0.21 $0.41 5.5%
ShockWave Medical Inc 32.15 12.29 12.75 4.86% $0.04 $0.16 49.21%
Penumbra Inc 254.87 6.89 7.86 1.81% $0.02 $0.17 25.51%
Masimo Corp 38.09 3.28 2.01 1.19% $0.06 $0.22 -19.46%
Envista Holdings Corp 18.77 0.88 1.59 1.21% $0.13 $0.38 2.57%
Average 61.66 6.64 4.97 4.23% $0.5 $1.15 11.0%

After examining DexCom, the following trends can be inferred:

  • The Price to Earnings ratio of 97.62 for this company is 1.58x above the industry average, indicating a premium valuation associated with the stock.

  • With a Price to Book ratio of 15.13, which is 2.28x the industry average, DexCom might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.

  • The Price to Sales ratio of 11.17, which is 2.25x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.

  • The Return on Equity (ROE) of 5.53% is 1.3% above the industry average, highlighting efficient use of equity to generate profits.

  • The company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $290 Million, which is 0.58x below the industry average. This potentially indicates lower profitability or financial challenges.

  • The gross profit of $620 Million is 0.54x below that of its industry, suggesting potential lower revenue after accounting for production costs.

  • The company is experiencing remarkable revenue growth, with a rate of 26.69%, outperforming the industry average of 11.0%.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio helps evaluate the capital structure and financial leverage of a company.

Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.

In light of the Debt-to-Equity ratio, a comparison between DexCom and its top 4 peers reveals the following information:

  • DexCom is positioned in the middle in terms of the debt-to-equity ratio compared to its top 4 peers.

  • This suggests a balanced financial structure, where the company maintains a moderate level of debt while also relying on equity financing with a debt-to-equity ratio of 1.2.

Key Takeaways

For the valuation analysis of DexCom in the Health Care Equipment & Supplies industry, the PE, PB, and PS ratios indicate that the company is trading at high multiples compared to its peers. This suggests that investors are willing to pay a premium for DexCom's earnings, book value, and sales. On the other hand, DexCom's high ROE and revenue growth indicate strong profitability and potential for future growth. However, the low EBITDA and gross profit suggest that DexCom may have lower operating efficiency and profitability compared to its industry peers.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

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