Here's Why You Should Hold DexCom Stock in Your Portfolio for Now

DexCom, Inc. DXCM is well positioned for growth in the coming quarters, supported by the significant potential of the continuous glucose monitoring (CGM) market. A strong preliminary fourth-quarter 2025 performance and a series of favorable coverage decisions are expected to contribute further. However, risks related to stiff competition persist.

This Zacks Rank #3 (Hold) company’s shares have lost 17.7% in the past six months against the industry’s 10.6% growth. The S&P 500 Index has gained 13.1% in the same time frame.

DXCM, a renowned medical device company and provider of continuous glucose monitoring (CGM) systems, has a market capitalization of $27.18 billion. It projects a 22.5% growth rate over the next five years and anticipates maintaining a strong performance going forward.

DexCom’s earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters and missed in the other two, the average surprise being 0.17%.

Let’s delve deeper.

CGM Market Represents a Huge Potential: The diabetes market offers massive long-term growth potential, with over 130 million people in the United States living with diabetes or prediabetes and more than 400 million affected globally, a figure expected to rise. This expanding patient base is driving strong demand for CGM devices, which help reduce hospitalizations, complications and overall treatment costs through real-time, user-friendly glucose tracking.

CGMs also enable more personalized diabetes management by allowing clinicians to tailor treatment plans based on individual data, while growing awareness and diagnosis of prediabetes further expand the addressable market. With the global CGM market projected to witness a 10% CAGR from over $6 billion today to about $14 billion by 2032, DexCom, as a leading CGM provider, is well positioned to deliver sustained growth over the next decade, driven by rising adoption and deeper market penetration.

Product Ecosystem and Innovation Driving Adoption: DexCom generates nearly 90% of its revenues from disposable CGM sensors, supported by strong demand driven by product performance and a positive user experience.The uptake of the G7 and One+ continues to accelerate, driven by broader insurance coverage, international expansion and growing physician support, especially among Type 2 diabetes patients.

Benefits like continuous readings without finger-pricking, comfortable wearability, and integrated alerts make DexCom’s systems compelling versus traditional glucose meters. The devices also connect to automated insulin delivery systems, which are becoming a key differentiator as diabetes care shifts toward smarter, closed-loop management.

Beyond hardware, DexCom’s software ecosystem is emerging as a powerful growth catalyst. New features, such as historical data review, AI-powered insights and deeper integration with platforms like Oura are helping patients better understand glucose trends and improve health-related decisions. This increases engagement and strengthens the company’s reimbursement case.

Stelo, launched in 2024, has already surpassed $100 million in its first year across Type 2, prediabetes and wellness markets, supported by strong subscription renewals and upcoming Amazon distribution. Together, smarter software, expanding access and strong product uptake position DexCom for sustained adoption and long-term growth.

Strong Preliminary Q4 Results: DexCom posted a strong preliminary fourth-quarter result, delivering double-digit revenue growth as the company continues to expand CGM access and scale its innovation pipeline. The U.S. growth has been driven by rising adoption among the rapidly expanding type 2 diabetes population, especially non-insulin and basal users, supported by deeper penetration into primary care and broader commercial reimbursement.

International momentum strengthened during the third quarter, with France and Canada emerging as key contributors following recent reimbursement gains tied to basal eligibility, while DexCom ONE+ helped bolster competitiveness in more price-sensitive European markets. This trend is likely to have continued in the fourth quarter.

Downsides

Stiff Competition: Rising competition in the Type 1 diabetes market, particularly from pump-integrated CGM systems, adds pressure. Additionally, the leadership transition in the U.S. commercial team introduces potential risks to execution as DexCom navigates these dynamics. While challenges persist, the company’s strategic initiatives and innovation-driven approach position it well for sustained growth.

DexCom, Inc. Price

DexCom, Inc. price | DexCom, Inc. Quote

Estimate Trend

DexCom has witnessed a negative estimate revision trend for 2026. In the past 30 days, the Zacks Consensus Estimate for 2026 earnings per share has moved down 1 cent to $2.46.

The consensus mark for the company’s first-quarter revenues is pegged at $1.17 billion, indicating a 12.8% improvement from the year-ago quarter’s reported number. The consensus estimate for first-quarter earnings is pinned at 48 cents per share, implying an improvement of 50% year over year.  

Stocks to Consider

Some better-ranked stocks from the broader medical space are AtriCure ATRC, Phibro Animal Health PAHC and Omnicell OMCL.

AtriCure, currently flaunting a Zacks Rank #1 (Strong Buy), reported a third-quarter 2025 adjusted loss per share of 1 cent, 90.9% narrower than the loss per share estimate. Revenues of $134.3 million beat the Zacks Consensus Estimate by 2.1%. You can see the complete list of today’s Zacks #1 Rankstocks here.

ATRC has an estimated earnings growth rate of 91.7% for 2026 compared with the industry’s 16.3% rise. The company beat on earnings in each of the trailing four quarters, the average surprise being 67.06%.

Phibro Animal Health, carrying a Zacks Rank #2 (Buy) at present, reported third-quarter 2025 adjusted earnings per share (EPS) of 73 cents, which surpassed the Zacks Consensus Estimate by 23.7%. Revenues of $363.9 million beat the Zacks Consensus Estimate by 2.6%.

PAHC has an estimated long-term earnings growth rate of 12.8% compared with the industry’s 13.7% rise. The company beat on earnings in each of the trailing four quarters, the average surprise being 20.77%.

Omnicell, carrying a Zacks Rank #2 at present, reported third-quarter 2025 adjusted EPS of 51 cents, which surpassed the Zacks Consensus Estimate by 41.7%. Revenues of $311 million beat the Zacks Consensus Estimate by 5.6%.

OMCL has an estimated long-term earnings growth rate of 9.4% compared with the industry’s 27.9% rise. The company beat on earnings in each of the trailing four quarters, the average surprise being 38.65%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research