TenQ

The DexCom story

DexCom makes continuous glucose monitors, with its expansion hinging on whether newer G7 sensors and Stelo can broaden use beyond people who rely on insulin.

Written from DexCom's own filings with the SEC, and rewritten when it publishes a new earnings release. Updated 2026-09-30.

  • $86.68share price, last close
  • $32.7Bmarket value
  • 30/36TenQ Score checks passed
  • 11.3%growth a year the price assumes

The story in brief

  • A broader patient base. The CONNECT trial showed significant improvements in glucose control for people with type 2 diabetes not using insulin, supporting DexCom’s push beyond its core insulin market.
  • Margins expanded. In the quarter to June 2026, revenue grew 13% to $1.308 billion and GAAP operating margin reached 24.3%, compared with 18.4% a year earlier.
  • Cash growth expectations. The reverse DCF implies 11.3% annual growth in free cash flow after stock pay for ten years, below DexCom’s historical pace and the TenQ check’s bar.

What drives the business

  • DexCom’s continuous glucose monitoring business is moving customers from G6 to G7 and G7 15 Day, with the company expecting that transition to finish by the end of 2026.
  • G7 15 Day extends sensor wear to 15.5 days, while insurance coverage and integration with insulin pumps and smart insulin pens support the core diabetes business.
  • Stelo, launched in August 2024 as the first over-the-counter glucose biosensor in the United States, expands access to adults with prediabetes and Type 2 diabetes who do not use insulin.
  • DexCom estimates the broader U.S. Type 2 population not using insulin or facing hypoglycemia risk at greater than 25 million people, and its CONNECT trial and redesigned Stelo app support its efforts to reach that population.
  • The United States accounted for 71% of revenue in the quarter to June 2026, but international reported revenue growth of 19% outpaced U.S. growth of 11%.

What the price assumes

At $86.68, the reverse DCF implies free cash flow after stock pay growing 11.3% a year for ten years, using a 10.2% discount rate.

DexCom delivered 64.8% annual growth on that measure over the last 5 years, while the TenQ check sets a 34.4% bar by slowing that record halfway toward 4%.

That implied growth is below both comparisons, although the earnings yield of 2.8% falls short of the 10-year Treasury yield of 5.2%.

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What could change the story

  • Revenue growth of 15.5% over the last twelve months trails the 17.0% annual pace over the last three years, so broader patient access has not yet reversed the slowdown.
  • Gross margin of 62.5% falls below the TenQ sector comparison of 66.9%, despite the improvement reported in the quarter to June 2026.
  • DexCom has $614 million of plant still under construction, or 24% of its plant total, making the pace of demand important as production capacity expands.
  • DexCom repurchased 8.6 million shares under its 2026 Share Repurchase Program in the quarter to June 2026, but the program can be modified, suspended or discontinued and carries no assurance of improving earnings per share.

What to watch next

  • DexCom raised its fiscal 2026 revenue guidance midpoint, with the upper end at $5.25 billion, and expects approximately 64% non-GAAP gross margin.
  • The next releases can show whether international growth remains faster than U.S. growth and whether the G6 transition remains on schedule for the end of 2026.
  • Evidence of Stelo adoption following the app redesign and CONNECT results would help distinguish clinical progress from commercial progress.
  • Free cash flow and stock pay will show whether expansion continues to support cash generation, against $1.4 billion of free cash flow and $162 million of stock pay over the last twelve months.

Sources

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