DXCM
DexCom, Inc.
$72.10
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Fair Value
Trading 20.8% below fair value
You pay
$72.10
Bear
$51.45
Fair
$91.01
Bull
$140.22
Bear
$51.45
-28.6%
12% stage 1 growth, 12% discount
Fair
$91.01
+26.2%
20% stage 1 growth, 12% discount
Bull
$140.22
+94.5%
26% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (20% base case)
Terminal Value % of EV
42%
Implied Market Multiple
28.4x
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 $78.25 from 52 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $91.01 per share.
Warnings
Wall Street's average price target is $78.25 (from 52 analysts). Our estimate is 25% above the consensus -- consider that gap carefully.
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