Dexcom Sees Stellar Second Quarter, and We've Raised Our Fair Value Estimate

Dexcom posted another quarter of strong growth that slightly exceeded our expectations, and we’ve modestly raised our fair value estimate to $286 per share, up from $263, after dialing up our top-line projections as continuous glucose monitors further penetrate the larger type 2 diabetes patient population. While we haven’t yet awarded Dexcom a moat, we think it is appropriate to revisit this issue now that the company has firmly crossed into profitability. Moreover, Dexcom has been able to fend off competition from Abbott and Medtronic, both of which have been making improvements to their own technologies. Based on its ability to consistently innovate, Dexcom seems to have the makings of intangible assets that could contribute to a moat.