We recently published a list of 10 Best Growth Stocks Under $100 to Buy Now. In this article, we are going to take a look at where DexCom, Inc. (NASDAQ:DXCM) stands against other best growth stocks under $100 to buy now.

Growth stocks are shares of companies which are expected to grow their revenue and earnings at a faster rate than the market average. These companies typically reinvest profits into expansion rather than paying dividends, aiming for long-term capital appreciation. Their high growth, however, tends to be priced at high valuations by the markets, making them significantly more expensive (in terms of P/E multiple, for example) than their more mature, value counterparts. As a result, the performance of growth stocks often depends on general market sentiment—during economic expansions, these stocks tend to outperform as their high growth expectations translate into reality, and their valuation multiple tends to expand; conversely, upon the slightest headwind or macroeconomic uncertainty, their growth and valuation multiple plummet.

READ ALSO: 12 Best Growth Stocks Under $25 to Buy Now

Growth stocks had a strong period of relative outperformance during 2021, as the zero-interest-rate environment, coupled with government stimulus, facilitated unprecedented growth in many industries, especially the consumer-related ones. This strong expansion fueled inflation, and as a result, growth stocks were hit hard by interest rates rising to more than 5% in the US – 2022 was a bad year for the US stock market and especially growth stocks. However, 2023 brought in a whole new growth story for the global markets – not only did the US economy adjust to the new regime of higher interest rates, but also the proliferation of AI megatrend created whole new giant markets and reinvestment opportunities across different sectors, ranging from software developers, semiconductor equipment manufacturers, automation players, and ending with water management, cooling and other infrastructure needed to support the future AI framework around the world.

The aforementioned developments led to a particularly strong 2023-2024 for the broad market and especially for growth stocks. Market valuations, as well as stock market concentration, reached close to record highs, as investors’ optimism in the “Roaring 2020s” scenario and the tremendous AI growth opportunities far outweighed potential recession fears and the negative impact of still elevated interest rates. The high valuation of the entire market, and particularly that of growth stocks, tends to coincide with the length of the horizon that the markets expect the economy to grow undisrupted with little to no risk. However, the new Trump 2.0 regime puts the previous growth scenario at risk—the “Roaring 2020s” scenario, which assumed significant economic acceleration due to onshoring, government stimulus, and huge productivity gains from AI, is now threatened by big cuts in federal financing of many large projects, as well as by the newly established tariffs potentially fueling a second wave of inflation, which will, in turn, require even higher interest rates in the economy.

The threats are confirmed by several forward-looking indicators and surveys, such as business conditions and CapEx outlook from the management of both large and small businesses, as well as by a new wave of layoffs going on in February. While the layoffs in the public sector were largely expected, February 2025 data also shows accelerating layoffs in the retail and technology sectors, which indirectly signals a weaker economy ahead. It is of no surprise that the broad US market sold off in the last few weeks, with many technology leaders down significantly from their 2024 peaks. We believe that attractive investment opportunities arise at times when fear and doubt take over the investors’ sentiment and lead to cheaper valuations for many growth stocks that would eventually recover as the challenges are navigated.

Our Methodology

We define growth stocks as those that have the potential to deliver future growth significantly above the average company in the universe. Consequently, we use Finviz to filter stocks that trade under $100 and have expected EPS compounded annual growth rate (CAGR) of at least 20% for the next 5 years. For all the companies, we also include the number of hedge funds having stakes in them, according to Insider Monkey’s Q4 2024 database. The stocks are ranked in ascending order of hedge funds having stakes in them.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

A doctor demonstrating how to use the medical device to a patient with diabetes.

DexCom, Inc. (NASDAQ:DXCM)

Number of Hedge Fund Holders: 69

Expected EPS CAGR in the next 5 years: 22.64%

DexCom, Inc. (NASDAQ:DXCM) is a medical device company specializing in continuous glucose monitoring (CGM) systems for people with diabetes. Its CGM devices provide real-time glucose readings through a sensor, transmitter, and mobile app, eliminating the need for traditional fingerstick testing. DXCM’s technology helps patients manage blood sugar levels, detect trends, and receive alerts for high or low glucose events. The company primarily serves individuals with Type 1 and Type 2 diabetes, as well as healthcare providers and research institutions, and focuses on innovation in sensor accuracy, wearable technology, and integration with insulin pumps and digital health platforms.

DexCom, Inc. (NASDAQ:DXCM) delivered strong performance in 2024 with revenue of $4.33 billion and organic growth of 12%, while expanding its interactive base by 25% to serve 2.8-2.9 million customers globally. The company has positioned itself for future growth through several strategic initiatives, including the submission of a 15-day CGM system to FDA for review, expansion of global manufacturing capacity, and delivery of 100 basis points of operating leverage. For 2025, DXCM has provided guidance of $4.6 billion in revenue, representing 14% growth, with significant cash generation potential as evidenced by over $1 billion in EBITDA.

DexCom, Inc. (NASDAQ:DXCM) is expanding its market reach beyond traditional insulin management through Stelo, its first over-the-counter product, which has already attracted 140,000-plus users since launch. The company’s international business has reached a significant milestone of $1 billion in revenue, with the company adding 4 million people internationally over the past 3 years. Looking ahead, DXCM is focused on the 15-day rollout in 2025, continuous software updates, and development of key gestational diabetes evidence, while working on dual analyte and continuous ketone monitoring capabilities. With that being said, DXCM is one of the best growth stocks to buy under $100.

Overall, DXCM ranks 5th on our list of best growth stocks under $100 to buy now. While we acknowledge the potential of DXCM L as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than DXCM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.