DXCM - DexCom: Q1'22 Earnings Strong Enough To Maintain Valuation But Not To Increase It

• DexCom reported its Q1'22 earnings on Thursday - $629m of revenues, up 25% year-on-year, but net income of $41m, down 250 basis points.
• DexCom is a high growth startup transitioning into a market incumbent in a lucrative market and management deserves huge praise for its achievements.
• But in 2021 its share price of >$646 probably ran too far ahead of its top and bottom line earnings - it is not too surprising the share price fell.
• At $408 presently, and a market cap of $40bn, the market clearly expects further growth, and soon.
• That may be too difficult for Dexcom to deliver in the short term - or even in the next 2 years - but progress with type 2 diabetics and insulin pumps ought to keep investors very interested.

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