Is DexCom Inc (DXCM) overvalued?
On Equity Rank's model estimate, DXCM trades close to its fair value (1% above it). DexCom Inc (DXCM) last closed at $79.41; the multi-method model fair value is $78.49.
| Price | Model fair value | Price vs model |
|---|---|---|
| $79.41 | $78.49 | 1% above |
What the answer rests on
- 1 of 9 valuation methods put DXCM's value above its price and 8 put it below, so the methods mostly agree.
- To justify today's price, DXCM's free cash flow would need to grow about 16.0% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 52.3% a year.
- DXCM trades at 34.8 times its last year's earnings, against a median of 30.9 for 37 profitable Medical Devices companies.
- Over the past year the price sat below the model fair value on 7% of trading days. The gap ranged from 19% below to 30% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind DXCM's fair value · What prices assume · Other companies