DexCom, Inc. (DXCM): A Bear Case Theory

We came across a bearish thesis on DexCom, Inc. on Hunterbrook’s Substack. In this article, we will summarize the bulls’ thesis on DXCM. DexCom, Inc.’s share was trading at $65.41 as of October 15th. DXCM’s trailing and forward P/E were 46.79 and 25.64 respectively according to Yahoo Finance.

Hunterbrook Media’s investigation reveals severe safety, operational, and financial concerns at Dexcom (DXCM), particularly surrounding its G7 continuous glucose monitor (CGM). After Dexcom secretly altered a key G7 sensor component in December 2023, internal studies showed the new material underperformed “by every accuracy metric.”

Despite this, the company continued selling the device without FDA clearance, leading the agency to classify the G7 as “adulterated.” Numerous users report inaccurate readings that have caused hospitalizations and deaths, including that of Billy Sosbe, whose G7 failed in the days preceding his passing. Other patients recount near-fatal insulin dosing errors and device failures.

Former employees cite a corporate culture prioritizing margins over safety, inadequate technical oversight, and rushed design decisions to compete with Abbott’s Freestyle Libre 3. Doctors and endocrinologists report repeated device failures, connectivity issues, and questionable Dexcom responses to concerns. Publicly, the company continues to market the G7 as its “most accurate CGM,” despite mounting complaints and FDA scrutiny.

Financially, Dexcom appears to be masking deteriorating fundamentals. Days sales outstanding have surged, work-in-process inventory has doubled, and aggressive accounting has boosted revenue recognition, echoing prior periods that preceded a 40% stock decline in 2024. Market share is threatened by Abbott’s superior devices, proposed Medicare changes, and consumer CGM initiatives such as Dexcom’s Stelo, which also shows accuracy problems and legal challenges. Executive departures, insider sales, and repeated recalls suggest systemic issues.

Overall, the Hunterbrook investigation portrays a once-innovative company whose G7 failures reflect both technical missteps and structural pressures, putting patients’ health at risk while exposing Dexcom to regulatory, competitive, and financial vulnerability.

Previously we covered a bullish thesis on DexCom, Inc. (DXCM) by Na’s Substack in May 2025, which highlighted the company’s leadership in continuous glucose monitoring, recurring revenue growth, and expansion into the Type 2 diabetes market. The company’s stock price has depreciated approximately by 19.77% since our coverage. This is because the thesis didn’t fully play out. Hunterbrook shares a contrarian but emphasizes safety and operational issues with the G7 sensor.

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Disclosure: None.