Trade-Ideas: DexCom (DXCM) Is Today's New Lifetime High Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified DexCom ( DXCM) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified DexCom as such a stock due to the following factors:

  • DXCM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $49.0 million.
  • DXCM has traded 137,904 shares today.
  • DXCM is trading at a new lifetime high.

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More details on DXCM:

DexCom, Inc., a medical device company, focuses on the design, development, and commercialization of continuous glucose monitoring systems. Currently there are 9 analysts that rate DexCom a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for DexCom has been 643,600 shares per day over the past 30 days. DexCom has a market cap of $5.8 billion and is part of the health care sector and health services industry. The stock has a beta of 0.79 and a short float of 4.5% with 5.49 days to cover. Shares are up 32.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates DexCom as a sell. Among the areas we feel are negative, one of the most important has been unimpressive growth in net income over time.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed compared to the Health Care Equipment & Supplies industry average, but is greater than that of the S&P 500. The net income has decreased by 3.2% when compared to the same quarter one year ago, dropping from -$12.50 million to -$12.90 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, DEXCOM INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for DEXCOM INC is rather high; currently it is at 67.17%. Regardless of DXCM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, DXCM's net profit margin of -17.71% significantly underperformed when compared to the industry average.
  • DEXCOM INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, DEXCOM INC continued to lose money by earning -$0.32 versus -$0.42 in the prior year. This year, the market expects an improvement in earnings (-$0.05 versus -$0.32).
  • Compared to its closing price of one year ago, DXCM's share price has jumped by 102.56%, exceeding the performance of the broader market during that same time frame. Regarding the future course of this stock, we feel that the risks involved in investing in DXCM do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

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