Buffett Brain · Research note
Score updated 26 Sept 2026
DXCM· Healthcare
DexCom
DexCom's strong operating margins and ROIC highlight its moat, but valuation and sector competition cloud clarity.
Buffett fit
Partial fit
Owner
54
Durability
100
Management
61
Price
33
Score updated 26 Sept 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Healthcare stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If we owned 100% of DexCom, we'd focus on maintaining its strong of 21.4% and leveraging its high of 18.0% to drive future growth.
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DexCom's durability is supported by a 5-year EPS CAGR of 39.8% and profitability in each of the last five years.
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DexCom's management has kept the share count relatively stable with a CAGR of 0.21% over five years, while executing a modest yield of 2.18%.
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With an yield of 4.71% and an EV/ of 25.4, DexCom is priced for growth.
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- The full reasoning behind all four pillars
- The 5-year price target and the return it implies
- What would change the call
- Graham, Lynch and Greenblatt on the same stock
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
8- 1 of 21.4% is top-quintile in the healthcare sector.
- 2 of 18.0% exceeds the sector's top-quintile cutoff of 10.7%.
- 3Net margin of 19.3% is well above the sector's 12.8% top-quintile threshold.
- 4Revenue CAGR of 17.5% over five years indicates robust growth.
Concerns
7- 1 of 24.6 suggests high growth expectations priced in.
- 2 of 61.8% is below the sector's top-quintile cutoff of 77.9%.
- 3Market cap decrease versus retained earnings of -4.08% may indicate market skepticism.
- 4EV/ of 25.4 is high, implying limited .
Price history
$78.32-49.7%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
DexCom, Inc. designs and sells continuous glucose monitoring (CGM) systems primarily for diabetes management. The company generates revenue through direct sales to healthcare providers and patients, leveraging a strong distribution network. With a of 61.8% and a net margin of 19.3%, the company shows strong unit economics. Its of 21.4% is top-quintile in its sector, indicating efficient operations.
How this analysis has moved
The call has held across 3 reviews.
Oct 11, 2026 → Oct 22, 2026
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
Similar companies in Healthcare
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