Should You Consider Investing in DexCom (DXCM)?

RiverPark Funds, an investment management firm, published its “RiverPark Large Growth Fund” third quarter 2021 investor letter – a copy of which can be downloaded here. The RiverPark Large Growth Fund (the “Fund”) returned -3.23% for the third quarter of 2021, while its benchmarks, the S&P 500 Total Return Index (“S&P”) advanced 0.58%, the Russell 1000 Growth Total Return Index (“RLG”) returned 1.16%, while the Morningstar Large Growth Category returned -0.07%. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.

RiverPark Large Growth Fund, in its Q3 2021 investor letter, mentioned DexCom, Inc. (NASDAQ: DXCM) and discussed its stance on the firm. DexCom, Inc. is a San Diego, California-based medical device company with a $55.3 billion market capitalization. DXCM delivered a 54.44% return since the beginning of the year, while its 12-month returns are up by 78.62%. The stock closed at $571. 01 per share on November 29, 2021.

Here is what RiverPark Large Growth Fund has to say about DexCom, Inc.  in its Q3 2021 investor letter:

“DXCM shares had a strong quarter from its stellar second quarter results and increased forward guidance. The company reported second quarter results that comfortably exceeded expectations, as revenue grew 32%, gross margins expanded 600 basis points year over year to 70% and, despite continuing to ramp expenses to address ever larger markets, EBITDA grew 28% year over year. Management also updated its annual guidance, raising revenue growth to 22%-25% and Adjusted EBITDA margin to 24%.

DexCom is the leading manufacturer of continuous glucose monitoring (CGM) systems for people with diabetes, with the most accurate CGM device on the market, as well as a significant new product in development–the G7, which is smaller than a quarter, longer wear, and lower cost than its current G6 monitor. Dexcom’s CGM is a platform technology addressing multiple diabetes populations and providers, and eventually other uses for its sensor technology, providing the company a long runway for growth (we expect greater than 20% annual revenue growth for years to come). We also believe that the business will be extremely profitable at scale driving its adjusted EBITDA margin to more than 25% for 2023. We expect the company to generate 40% annual EPS growth over the next few years, while also generating sizable excess free cash flow.”

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Based on our calculations, DexCom, Inc. (NASDAQ: DXCM) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. DXCM was in 53 hedge fund portfolios at the end of the third quarter of 2021, compared to 49 funds in the previous quarter. DexCom, Inc. (NASDAQ: DXCM) delivered a 9.49% return in the past 3 months.

Disclosure: None. This article is originally published at Insider Monkey.