A Potential Turnaround Stock In Digital Healthcare

This fast-growing healthcare technology company focused on glucose monitoring may be showing signs of recovery after a difficult two years. In this analysis, we examine why investors are becoming more optimistic again, how a massive untapped global market could fuel future growth, and whether the recent share price rebound has further to run.

Is it time to activate Dexcom Inc?

Dexcom DXCM US is a Medtech company that focuses on Continuous Glucose Monitoring or GCM.

You could say it’s in their blood, because Dexcom’s products allow type-1 diabetics to track and monitor glucose levels in real time, without the need to manually test blood glucose.

The company makes money through the sale of monitors and sensors, and it offers its end users monthly subscriptions.

Dexcom recently held an Investor Day, at which it updated the market on its plans and progress, and there was lots to like.

The company had served 3.50 million patients as of the end of 2025; that number has grown almost 4-fold since 2020, and the firm’s revenue has grown to $4.50 billion per annum, with operating margins now above 20.00%.

Dexcom believes that its patient numbers can more than double by the end of 2027, which should drive revenue growth of at least +10.00% per annum, out to 2030.

That might just be the start of it, however!

As there are even greater opportunities for growth within the type 2 non-insulin-dependent population, known in the trade as T2 NI.

There are thought to be as many as 40.0 million Americans in this category. To date, Primary Care Physicians (PCPs) in the US  haven’t regularly recommended glucose monitors to this group.

However, attitudes seem to be changing and research from US broker William Blair found that around 34.0% of PCPs would consider recommending CGM devices to as many as 80.0% of their T2 NI patients. If wider insurance coverage/recognition were available.

What’s more, there are estimated to be 800 million diabetics globally, with large concentrations found in the highly populous, fast-growing economies of Asia, as well as those in Western Europe.

Dexcom has the opportunity to not only make inroads into the T2 NI markets in North America, but also to start selling to both type 1 and type 2 diabetics across Europe and Asia.

When you consider the numbers here, aiming to double the number of users by 2027 doesn’t sound outlandish at all.

And, with operational margins greater than 20.0% and growing, you can see how that quickly could impact the bottom line.

Performance

Dexcom DXCM stock has performed poorly in recent times and is down by -52.49% over the last 2 years, for example.

However, it posted a +6.59% gain on 15 May, the stock’s third biggest daily gain during the last 12 months.

What’s more, it traded more than twice its average daily volume of 5.40 million shares as it did so.

Why the jump in the stock price and volumes traded?

Dexom has struck a deal with shareholder and activist investor Elliot Management. A firm known for highlighting and realising shareholder value.

The consensus price target among the 27 analysts that cover the stock is $82.88, Thats more than $20.00 above Friday’s closing level.

 

Pros:

A very large Total Addressable Market (TAM) that has a genuine need for CGMs
Room to grow revenues and operating margins by climbing the value chain.
Scope for further expansion into European and Asian markets.

Cons:

Competition from Abbott Labs ABT US, Libre products and GLP1 drugs.
Access to T2 NI patients, as customers, is not within Dexcom’s direct control.
As yet, they offer no one-size-fits-all device for all patient needs.

Technical Outlook

The stock has now broken above the downtrend line drawn from the August 2025 highs, and is testing the 50-day MA line in the process. The stock has also posted 3 new 5-day highs, and was one of only a clutch of S&P 500 stocks that gapped higher on the open on Friday, and then made further gains in the session, and that in a weak market

Fundamental outlook

Dexcom looks cheap, but given the potential to grow both its top and bottom lines, over the mid-term, you coud be forgiven for thinking it’s priced at giveaway levels.

The stock is rated a strong buy by 22 out of 27 analysts who research the name. It trades at an undemanding forward P/E of 22.59 and a price-to-sales ratio of just 4.79 times.

Its 5-year earnings and revenue growth come in at +168.0% and +142.0%, respectively.

Elliott Management partner Marc Steinberg summed up the opportunity when he said that:

“The firm (Elliot) was one of Dexcom’s largest investors because it believes the market for glucose monitors remains meaningfully underpenetrated, and that the company (Dexcom) is poised to deliver sustained double-digit growth for years to come.”