Is DexCom, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for DexCom, Inc. has moved from very expensive to expensive, indicating a slight improvement but still suggesting that the stock is overvalued. The company is currently assessed as overvalued, with a P/E ratio of 64, significantly higher than its peer Edwards Lifesciences Corp., which has a P/E of 31.17, and Agilent Technologies, Inc., which stands at 27.42. Additionally, DexCom's EV to EBITDA ratio is 39.43, compared to Edwards Lifesciences' 26.51, further highlighting its premium valuation.
In terms of returns, DexCom has underperformed relative to the S&P 500 across multiple time frames, with a year-to-date return of -14.36% compared to the S&P 500's 13.30%. This trend of underperformance over the past three and five years, with returns of -33.22% and -34.22% respectively, reinforces the notion that the stock is not only overvalued but also struggling to deliver shareholder value in comparison to broader market benchmarks.