1 Healthcare Stock Leading the Pack

DexCom (DXCM 0.10%) delivered a strong quarter of growth, and the need for its life-saving tools and data for individuals with diabetes will continue to grow over the long term. In this clip from "3 Minute Stocks Updates" on Motley Fool Live, recorded on June 22, Motley Fool contributor Rachel Warren discusses DexCom's quarterly performance and how it is positioned for continued growth in the years ahead.

Rachel Warren: This is another healthcare stock for you. DexCom is the leader in the continuous glucose monitoring device market. They are known for their G6 system, the G7 system, which is the latest and newest version of that and has secured the CE mark in Europe and is hoped to be approved in the U.S. later this year. There's already been a limited launch of that G7 system, which is going to be lighter, have a longer wear time, smaller, how it works, that continuous glucose monitoring device, you've got a one-touch applicator that puts a small sensor just beneath the skin. A slim sensor that measures glucose levels just beneath the skin and then sense data wirelessly to a display device using a transmitter. Then, you have a small touchscreen receiver on your compatible smart devices like your phone that displays that real-time glucose data. Life-saving tools and data for individuals with diabetes. According to the Vantage Market Research firm, global continuous glucose monitoring devices, that market is on track to hit a valuation of about $13.2 billion by the year 2028. That's a CAGR of about 11% between this year and the year 2028. Again, DexCom is the leader in the space.

They also recently launched a simpler version of their flagship continuous glucose monitoring device system called the DexCom ONE. That system and app has been launched in a limited area in the U.K. and Spain at this time. But this is, as management has said, is setting them up and these regions will be DexCom's first multi-tiered product markets. It was a pretty good first quarter for the company. Revenue was up 25% year-over-year. Growth in the U.S. was up 18% year-over-year, and international revenue growth was up 43% year-over-year. The company is profitable. Net income totaled $97.3 million for the three-month period. That was up from $56.5 million in the first-quarter of 2021. The company also has a really strong cash position, $2.69 billion in cash and cash equivalents, and marketable securities on its balance sheet at the end of the first quarter. Another nice note that we always like to see from management, they reiterated their guidance and their first quarter report. They're currently targeting full-year revenue growth in the 15-20% ballpark with a gross profit margin on a non-GAAP basis of about 65%. This is a company that I'm invested in. I really like the business, I like what they're doing, and it was a really strong quarter of growth for the company.