Why is Dexcom Stock Down 40% So Far This Year?

We are reminded on an almost weekly basis of the truth that what matters most in building a successful portfolio is time in the market, not timing the market for what we think is hot at the moment. Our approach is to rigorously vet not just a particular company but the investment theme behind it. If both are solid, then we are not easily deterred by a bad quarter or two. In fact, when the stock of a quality company is down, that’s when we want to buy.

Buy Dexcom Stock on the Dip?

So, with that in mind, let’s revisit Dexcom (DXCM), a medical device company that sells continuous glucose monitoring (CGM) systems for diabetics to track their blood sugar levels. Dexcom has been on our radar since at least 2015 when the company’s market cap hit about $7 billion after shares climbed about 100% year over year. By the time we did a deeper dive into DXCM in July 2020, it had joined the big-cap club (defined as a market cap of at least $10 billion) with a value of about $40 billion. But just two years later, we wondered just how much growth Dexcom had left after shares dropped when the company did not meet analysts’ lofty expectations.