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    DexCom (DXCM): Reassessing Valuation After Class Action Lawsuits and New FDA Clearance for Smart Basal

    Simply Wall St·12/25/2025 12:32:04
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    DexCom (DXCM) is in an awkward spotlight right now, with fresh class action lawsuits alleging it overstated the safety and reliability of its G6 and G7 devices, even as it just secured FDA clearance for its Smart Basal technology.

    See our latest analysis for DexCom.

    Investors seem torn between DexCom’s legal overhang and its growth story, with an 8.4% 1 month share price return but a 1 year total shareholder return of roughly negative 16%, suggesting fading longer term momentum despite recent optimism around Smart Basal.

    If this mix of risk and innovation has your attention, it might be a good moment to explore other healthcare names through healthcare stocks and see what else is reshaping the sector.

    With shares down sharply over the past year but still showing double-digit revenue growth and trading at a sizeable discount to analyst targets, is DexCom now a mispriced growth story, or is the market already discounting its future gains?

    Most Popular Narrative: 20.5% Undervalued

    With DexCom last closing at $67.42 against a most popular narrative fair value near $84.85, the story leans toward meaningful upside if the assumptions land.

    The recent expansion of insurance reimbursement for type 2 non insulin diabetes patients now covering nearly 6 million lives across the three largest U.S. PBMs opens a large, previously untapped segment of DexCom's addressable market, driving new patient growth and supporting robust multi year revenue expansion.

    Growing global recognition of CGM efficacy, with recent clinical trial evidence and expanded coverage in international markets (e.g., France, Japan, and Ontario, Canada), positions DexCom to penetrate underpenetrated regions and diversify revenue streams, creating sustainable top line growth.

    Read the complete narrative.

    Curious how steady double digit growth, rising margins, and a premium future earnings multiple all combine into that upside case? The narrative lays out a detailed roadmap, but the boldest assumptions stay just under the surface until you dive in.

    Result: Fair Value of $84.85 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, that upside hinges on Medicare avoiding aggressive CGM price cuts and on DexCom keeping pace as rivals push next generation, multi analyte sensors.

    Find out about the key risks to this DexCom narrative.

    Build Your Own DexCom Narrative

    If the consensus view does not quite sit right with you, dive into the numbers yourself and build a personalized thesis in minutes: Do it your way

    A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding DexCom.

    Ready for your next investing move?

    Before you move on, put Simply Wall Street’s powerful Screener to work so you do not miss high conviction opportunities hiding beyond DexCom.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.