The Goldilocks Scenario Played Out; Reiterate Buy

Research evidence excerpt

The Goldilocks Scenario Played Out; Reiterate Buy

TD Cowen DexCom

Global Research May 15, 2026

VALUATION METHODOLOGY AND RISKS

Valuation Methodology

Medical Supplies and Devices: Diabetes

Price targets are based on several methodologies which may include: analysis of market risk,

growth rate, revenue stream, discounted cash flows (DCF), EBITDA, EPS, cash flow (CF), free

cash flow (FCF), EV/EBITDA, P/E, PE/growth, P/CF, P/FCF, premium (discount) / average group

EV/EBITDA, premium (discount) / average group P/E, sum of the parts, net asset value, dividend

returns, and return on equity (ROE) over the next 12 months.

Our valuation methodology is primarily based on current year and forward year EV/Sales and

EV/EBITDA multiples, as well as current year and forward P/E multiples, total return/PE ratio,

market cap/free cash flow metrics, and dividend yield comps.

We make investment recommendations on certain early stage, pre-revenue companies based

upon an assessment of their business model, technology, probability of market success,

and the potential market opportunity, balanced by an assessment of applicable risks. Such

companies may not be assigned a price target.

Investment Risks

Risks to the Diabetes Device sector may include: regulatory processes and potential delays

in the commercial launch of new products, potential for pricing pressures from payor/CMS,

premium relative valuations, competition, and high levels of investment needed to compete

successfully, making profitability difficult.

We make investment recommendations on early stage diabetes device companies based upon

an assessment of their technology, the probability of market success (competitive, regulatory,

reimbursement, etc), and the potential market opportunity in the event of success. However,