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

DexCom, Inc. DXCM is well-poised for growth in the coming quarters, backed by a huge potential in the CGM market. A strong third-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 29.5% year to date against the industry’s 29.5% growth. The S&P 500 Index has gained 16.1% in the same time frame.DXCM, a renowned medical device company and provider of continuous glucose monitoring (CGM) systems, has a market capitalization of $21.45 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 twice, the average surprise being 0.17%.Let’s delve deeper.CGM Market Represents a Huge Potential: The diabetes market represents a huge market potential, with more than 130 million people with diabetes or prediabetes in the United States. Globally, more than 400 million people are suffering from diabetes, which is expected to grow in the coming years. The rising prevalence of diabetes drives the demand for CGM devices, as it reduces hospitalizations, complications and costs associated with diabetes management by offering a user-friendly and advanced solution for diabetes management.Moreover, the ability of CGM devices to enable healthcare professionals to customize diabetes management plans based on individual requirements will be a key driver going forward. The real-time monitoring of glucose levels is fueling growth of CGM devices. The increasing incidence of prediabetes also represents an opportunity for growth. The global CGM device market is estimated to witness at a CAGR of nearly 10% from more than $6 billion currently and will reach $14 billion by 2032.DexCom, as one of the leaders in the CGM-device market, is expected to show strong growth over the next decade on the back of the market growth and rising penetration of CGM devices.Product Ecosystem and Innovation Driving Adoption: DexCom generates nearly 90% of its revenues from disposable CGM sensors, supported by high demand thanks to strong product performance and 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 is 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 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.Positive Coverages: Dexcom is rapidly expanding global reimbursement for its CGM sensors, driving broader adoption—especially among Type 2 diabetes patients. As of July 2025, all three major U.S. Pharmacy Benefit Managers (PBMs) now cover Dexcom CGM for all diabetes patients, including approximately 6 million non-insulin Type 2 lives, with efforts underway to reach the remaining approximately 25 million supported by an ongoing RCT.International momentum is strong: Dexcom One+ secured basal-insulin reimbursement in France and Canada; New Zealand expanded Type 1 coverage; Germany and Australia are progressing on Type 2 access; and Ontario now covers all insulin users. Japan is advancing direct-sales-driven market access, while Dexcom continues working with CMS and PBMs for broader federal inclusion. These efforts are significantly improving affordability, fueling record new patient starts and positioning G7, One+, and Stelo for deeper penetration in 2025 and beyond.Strong Q3 Results: DexCom delivered a solid third-quarter update, marked by double-digit top-line growth and a confident raise in full-year guidance, as it executes on broadening access to CGM and scaling its innovation engine.Per the third-quarter earnings call, strong U.S. momentum came from continued CGM uptake among the fast-growing type 2 population, particularly non-insulin and basal users, supported by broader primary-care reach and expanding commercial coverage. International growth accelerated for the third consecutive quarter, with France and Canada highlighted as standout markets after recent reimbursement wins tied to basal eligibility. Meanwhile, DexCom ONE+ continued aiding competitive positioning in price-sensitive geographies, helping expand the company’s footprint across Europe.Image Source: Zacks Investment ResearchDownsidesStiff 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.Estimate TrendDexCom has witnessed a stable estimate revision trend for 2025. In the past 30 days, the Zacks Consensus Estimate for 2025 earnings per share has moved up 1 cent to $2.07.The consensus mark for the company’s fourth-quarter revenues is pegged at $1.24 billion, indicating an 11.7% improvement from the year-ago quarter’s reported number. The consensus estimate for fourth-quarter earnings is pinned at 65 cents per share, implying an improvement of 44.4% year over year.  Stocks to ConsiderSome better-ranked stocks in the broader medical space are Solventum Corporation SOLV, Boston Scientific Corporation BSX and HealthEquity HQY .Solventum, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 4.1%. SOLV’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 13.91%. You can see the complete list of today’s Zacks #1 Rank stocks here.Solventum’s shares have gained 8.2% compared with the industry’s 6.2% growth so far this year.Boston Scientific, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 14%. BSX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 8.1%.Boston Scientific’s shares have gained 13.2% compared with the industry’s 5.6% growth so far this year.HealthEquity, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 21.7%. HQY’s earnings surpassed estimates in three of the trailing four quarters and missed once, with the average surprise being 11.05%.HealthEquity’s shares have risen 0.6% compared with the industry’s 6.2% growth so far this year.Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. Little-known AI firms tackling the world's biggest problems may be more lucrative in the coming months and years.See "2nd Wave" AI stocks now >>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 Boston Scientific Corporation (BSX): Free Stock Analysis Report DexCom, Inc. (DXCM): Free Stock Analysis Report HealthEquity, Inc. (HQY): Free Stock Analysis Report Solventum Corporation (SOLV): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks