DailyPlay – Opening Trade (DXCM) – December 3, 2024

DXCM Bullish Opening Trade Signal

Investment Rationale

DexCom, Inc. (DXCM) recently broke out above its trading range with strong momentum, outperforming the S&P 500, and signaling potential upside to our $95 target.  

The company has modestly undervalued fundamentals, trading at a forward price-to-earnings (PE) ratio of 38.31x, above the industry average of 24.87x. This premium is supported by robust growth metrics, including an expected earnings per share (EPS) growth of 23.17%, compared to the industry average of 8.70%. Additionally, DexCom’s projected revenue growth of 13.80% and net margins of 17.22% outperform peer averages of 6.34% and 14.13%, respectively, reflecting its strong competitive positioning.

DXCM – Daily

Trade Details

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish Debit Spread

Details: Buy to Open 3 DXCM Jan 17 $75/$92.50 Vertical Spreads @ $6.52 Debit per Contract.

Total Risk: This trade has a max risk of $1,956 (3 Contract x $652) based on a hypothetical $100,000 portfolio normally risking 2%. We suggest using 2% of your portfolio value and divide it by $652 to select the # contracts for your portfolio.

Counter Trend Signal: This is a bullish trade on a stock that is expected to continue its bullish trajectory.

1M/6M Trends: Bullish/Neutral

Relative Strength: 2/10

OptionsPlay Score: 107

Stop Loss: @ $3.26 (50% loss of premium paid)

View DXCM Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Monday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View DXCM Trade