Dexcom (DXCM) , a leader in continuous glucose monitoring (CGM) systems, has positioned itself as a standout in the medical device space by leveraging innovation to maintain dominance despite rising competition. The company’s investments in digital health platforms and integration with consumer brands further solidify its competitive advantage. Investors are starting to pay attention to DXCM after struggling this year, as its ability to address the growing global diabetes market contributes to its long-term potential for growth. If we look at the chart, the stock has struggled after gapping lower this summer, but it recently broke out above a significant $75 resistance level, signaling renewed investor confidence. This breakout, combined with its relative outperformance versus the S & P 500, suggests that the stock is potentially set to rally and close its recent gap. Investors appear to be recognizing its growth potential after a challenging year, setting up for upside toward its $110 target. DXCM trades at a premium valuation at 38 times forward earnings compared to the industry average of 25 times. However, its valuation is justified by its leading growth metrics, including an expected EPS growth rate of 23% (industry median: 9%) and revenue growth rate of 14% (industry median: 6%). Additionally, DXCM net margins of 17% exceed the industry median of 14%, highlighting its ability to generate superior profitability despite competitive pressures. With CGM systems seeing increased adoption globally and expanding reimbursement coverage in emerging markets, DXCM is well-positioned to reverse its recent revenue declines. While rivals like Abbott compete with alternative CGM devices, Dexcom’s focus on accuracy, real-time data delivery sets it apart as the preferred choice for both patients and healthcare providers. The trade To capitalize on Dexcom’s long-term growth potential, I’m selling a cash secured put . I’m looking at the J an $80 Put @ $4.50 Credit to potentially acquire the stock with a 5.96% discount. You will collect $450 in premium per contract and have an obligation to purchase 100 shares of the stock at a net price of $75.50 if the stock closes below $80 and the put option is exercised by the buyer. DISCLOSURES: (No disclosures) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
How to buy a health care turnaround story at a discount using options