DXCM

Dexcom is a durable, profitable grower. Revenue has compounded from $2.45B in FY2021 to $4.66B in FY2025 (+15.6% YoY), while FY2025 net income jumped +45.1% to $836M, operating income +52.0% to $912M, and diluted EPS +47.2% to $2.09 — earnings are scaling faster than the top line, the hallmark of operating leverage. Quality metrics back this up: 60.1% gross margin, 19.6% operating margin, 30.5% ROE, and $1.44B of operating cash flow (+45.6%). The balance sheet is fortress-grade — $918M cash, negligible long-term debt, equity up 30.6% and liabilities/equity at just 1.31x and falling — leaving room for the continued buybacks ($500M in FY2025) that are shrinking the share count.

Valuation is a premium but a defensible one. At $72.47 the stock trades at 34.7x FY diluted EPS and 6.0x sales. Against ~16% revenue growth, 45%+ earnings growth, and a 30% ROE, that multiple is not stretched for a category-leading medtech franchise; the P/E sits well below the earnings growth rate. The G7 15 Day launch (late 2025) and Stelo — the first over-the-counter glucose biosensor in the U.S., extending CGM into the far larger prediabetes/Type 2 non-insulin and metabolic-health markets — are the credible drivers that justify continued double-digit growth.