DXCM
DexCom, Inc.
$71.54
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Fair Value
Trading 19.7% below fair value
You pay
$71.54
Bear
$51.72
Fair
$89.11
Bull
$134.65
Bear
$51.72
-27.7%
11% stage 1 growth, 12% discount
Fair
$89.11
+24.6%
19% stage 1 growth, 12% discount
Bull
$134.65
+88.2%
25% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (19% base case)
Terminal Value % of EV
41%
Implied Market Multiple
28.2x
Market is pricing in (growth)
15.5%
vs 19.0% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $84.09 from 52 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $89.11 per share.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions