San Diego, California-based DexCom, Inc. (DXCM) is a medical device company. It focuses on the design, development, and commercialization of continuous glucose monitoring (CGM) systems. With a market cap of $27.6 billion, DexCom's operations span the Americas, Europe, and internationally.

Companies worth $10 billion or more are generally described as “large-cap stocks,” DexCom fits the bill perfectly. Given the company’s strong customer base and dominance in the niche space of diabetes, its valuation above this mark is unsurprising. The company provides its systems for the management of diabetes and metabolic health by patients, caregivers, and clinicians.

Despite its notable strengths, DexCom’s stock has tanked 50.5% from its three-year high of $142 touched on Mar. 26, 2024. Moreover, DXCM stock has plummeted 12.7% over the past three months, underperforming the Dow Jones Industrials Average’s ($DOWI) 6.2% decline during the same time frame.

DexCom’s performance looks even grimmer over the longer term. DXCM stock plunged 47.2% over the past 52 weeks, significantly underperforming DOWI’s 6.9% gains during the same time frame.

To confirm the overall bearish trend, DXCM has remained mostly below its 200-day moving average since mid-June 2024 with some fluctuations and dropped notably below its 50-day moving average in March 2025.

Despite missing analysts' earnings estimates, DXCM stock soared 5.9% in the trading session after the release of its Q4 results on Feb. 13. Driven by solid organic growth, the company reported a 7.6% year-over-year increase in revenues to more than $1.1 billion. However, due to higher COGS and SG&A expenses, the company experienced a significant margin contraction. Its adjusted gross margin contracted 480 bps compared to the year-ago quarter to 59.4% while its adjusted operating margin dropped 470 bps to 18.8%. This led to a 12.3% year-over-year decline in non-GAAP net income to $179 million.

On the brighter side, DexCom reaffirmed its fiscal 2025 revenue growth guidance of 14%, adjusted gross margin guidance of 64% to 65% and adjusted operating margin guidance of 21% which likely boosted investor confidence.

Nevertheless, DexCom has significantly underperformed its peer STERIS plc’s (STE) 2.5% decline in stock prices over the past 52 weeks.

Despite its underperformance, analysts remain optimistic about DXCM’s prospects. Among 22 analysts covering the stock, the consensus rating is a “Strong Buy.” Its mean price target of $103.23 suggests a 46.9% premium to current price levels.