In today's rapidly changing and fiercely competitive business landscape, it is vital for investors and industry enthusiasts to carefully evaluate companies. In this article, we will perform a comprehensive industry comparison, evaluating DexCom DXCM against its key competitors in the Health Care Equipment & Supplies industry. By analyzing important financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company's performance within 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 | 112.21 | 17.18 | 12.83 | 5.53% | $0.29 | $0.62 | 26.69% |
| Abbott Laboratories | 33.33 | 4.54 | 4.29 | 3.85% | $2.66 | $5.54 | -2.56% |
| Stryker Corp | 42.08 | 6.02 | 5.47 | 3.92% | $1.2 | $3.16 | 9.6% |
| Medtronic PLC | 27.31 | 1.92 | 3.13 | 1.54% | $2.02 | $5.07 | 4.49% |
| Boston Scientific Corp | 65.67 | 4.18 | 5.70 | 2.72% | $0.98 | $2.43 | 11.26% |
| Becton Dickinson & Co | 45.84 | 2.63 | 3.48 | 0.42% | $0.88 | $1.7 | 4.28% |
| Edwards Lifesciences Corp | 28.64 | 6.10 | 7.04 | 5.91% | $0.46 | $1.13 | 12.27% |
| IDEXX Laboratories Inc | 46.98 | 29.50 | 10.78 | 17.75% | $0.31 | $0.55 | 8.78% |
| GE HealthCare Technologies Inc | 21.22 | 4.57 | 1.69 | 5.27% | $0.93 | $1.94 | 5.38% |
| Zimmer Biomet Holdings Inc | 48.89 | 1.85 | 3.19 | 1.31% | $0.51 | $1.24 | 5.02% |
| ResMed Inc | 24.74 | 5.27 | 5.13 | 5.24% | $0.34 | $0.6 | 16.0% |
| Steris PLC | 36.87 | 3.25 | 3.89 | 1.87% | $0.34 | $0.59 | 11.82% |
| Baxter International Inc | 76.76 | 2.21 | 1.17 | 36.69% | $0.28 | $1.12 | 2.74% |
| Hologic Inc | 39.35 | 3.52 | 4.45 | 1.78% | $0.25 | $0.5 | -3.97% |
| Insulet Corp | 100.84 | 19.94 | 7.85 | 8.94% | $0.08 | $0.29 | 26.97% |
| Teleflex Inc | 24.75 | 2.30 | 3.38 | 3.22% | $0.23 | $0.42 | 8.68% |
| Penumbra Inc | 217.03 | 7.97 | 8.91 | 0.85% | $0.04 | $0.18 | 26.8% |
| Globus Medical Inc | 31.16 | 1.51 | 4.04 | 0.03% | $0.09 | $0.25 | 50.95% |
| ShockWave Medical Inc | 26.67 | 10.49 | 9.72 | 5.74% | $0.05 | $0.16 | 41.64% |
| Masimo Corp | 55.92 | 3.78 | 2.33 | 0.82% | $0.05 | $0.23 | -12.82% |
| Envista Holdings Corp | 21.52 | 0.93 | 1.58 | 0.5% | $0.09 | $0.36 | 0.03% |
| Average | 50.78 | 6.12 | 4.86 | 5.42% | $0.59 | $1.37 | 11.37% |
Upon analyzing DexCom, the following trends can be observed:
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At 112.21, the stock's Price to Earnings ratio significantly exceeds the industry average by 2.21x, suggesting a premium valuation relative to industry peers.
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With a Price to Book ratio of 17.18, which is 2.81x 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.
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The Price to Sales ratio of 12.83, which is 2.64x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
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With a Return on Equity (ROE) of 5.53% that is 0.11% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
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With lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $290 Million, which is 0.49x below the industry average, the company may face lower profitability or financial challenges.
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The company has lower gross profit of $620 Million, which indicates 0.45x below the industry average. This potentially indicates lower revenue after accounting for production costs.
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The company's revenue growth of 26.69% exceeds the industry average of 11.37%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio provides insights into the proportion of debt a company has in relation to its equity and asset value.
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.
By evaluating DexCom against its top 4 peers in terms of the Debt-to-Equity ratio, the following observations arise:
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DexCom is in a relatively stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 1.2.
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This implies that the company relies less on debt financing and has a more favorable balance between debt and equity.
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.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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