Dexcom (DXCM) is a leader in continuous glucose monitoring (CGM) systems and has built a prominent position in the medical device space by leveraging innovation to maintain its competitive advantage despite increasing competition. The company’s investment in its digital health platform and integration with consumer brands further solidifies its competitive advantage. Investors are starting to take notice of DXCM, which has struggled this year, as the company’s ability to serve the growing global diabetes market contributes to its long-term growth potential. The chart shows that the stock has been struggling after a big sell-off this summer, but it recently broke through significant resistance at $75, indicating renewed investor confidence. This breakout, combined with its relative outperformance against the S&P 500, suggests the stock could move higher and close its recent gap. Investors recognize the company’s growth potential after a difficult year and appear to be preparing for upside toward its $110 target. DXCM trades at a premium valuation of 38x forward earnings compared to the industry average of 25x. However, that valuation is justified by key growth metrics such as expected EPS growth of 23% (industry median: 9%) and revenue growth of 14% (industry median: 6%). Additionally, DXCM’s net profit margin of 17% is higher than the industry median of 14%, highlighting the company’s ability to generate superior profitability despite competitive pressures. With CGM system adoption increasing globally and reimbursement coverage expanding in emerging markets, DXCM is well-positioned to reverse recent revenue declines. While rivals like Abbott compete with alternative CGM devices, Dexcom’s focus on accuracy and real-time data delivery makes it stand out as the preferred choice for both patients and healthcare providers. Trade We are selling a cash-backed put to take advantage of Dexcom’s long-term growth potential. I am considering J an $80 Put @ $4.50 Credit to acquire the stock at a 5.96% discount. You collect a premium of $450 per contract, and if the stock ends below $80 and the buyer exercises the put option, you are obligated to purchase 100 shares at a net price of $75.50. Disclosure: (Undisclosed) All opinions expressed by CNBC Pro contributors are solely their own and do not reflect the opinions of CNBC, NBC UNIVERSAL, its parent or affiliate companies, and do not reflect the opinions of CNBC, NBC UNIVERSAL, its parent or affiliates, and It may have been previously disseminated on the internet. Or another medium. The above is subject to our Terms of Use and Privacy Policy. This content is provided for informational purposes only and does not constitute financial, investment, tax, or legal advice or a recommendation to purchase any securities or other financial assets. The content is general in nature and does not reflect your unique personal circumstances. The above may not be appropriate for your particular situation. Before making any financial decisions, you should strongly consider seeking the advice of your own financial or investment advisor. Click here for full disclaimer.
How to buy a health care turnaround story at a discount using options
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