DexCom, a company known for its continuous glucose monitoring (CGM) devices, is facing a critical transition. Its growth has relied heavily on patients with insulin-treated diabetes, but the rising use of GLP-1 drugs is reducing the number of such patients. DexCom aims to expand CGM use to Type 2 diabetes patients not treated with insulin, but commercial success in this segment remains uncertain despite positive clinical trials. The company's stock is valued at 28 times earnings, which is not expensive but offers limited upside due to execution risks and the need for proof of new market growth. The current recommendation is to hold the stock while waiting for clearer evidence of sustainable expansion.
