DexCom vs. Insulet: Which Diabetes Stock Is a Better Buy in 2026?

Diabetes management is evolving rapidly as the industry innovates to treat the more than 40 million Americans with type 1 or type 2 diabetes. Deciding between two leaders in monitoring and treatment, DexCom (NASDAQ:DXCM) and Insulet (NASDAQ:PODD), requires a close look at their growth and valuation.

DexCom focuses on continuous glucose monitoring, while Insulet specializes in wearable insulin pumps. Both companies are leaders in their respective niches, but they address different aspects of the same chronic condition. This comparison evaluates their financials and market positions to determine which stock offers a more compelling opportunity today.

The case for DexCom

DexCom focuses on continuous glucose monitoring (CGM) systems that allow people with diabetes to track glucose levels in real time without frequent fingersticks. The company operates within the broader healthcare sector and sells its products in approximately 52 countries. Certain distribution agreements accounted for 10% or more of total revenue in 2025, and such customer concentration adds a layer of risk to the business.

In FY 2025, revenue reached nearly $4.7 billion, up 15.6% from the previous year. The company reported net income of approximately $836.3 million for 2025, up $168.8 million from the prior year. This resulted in a net margin of 17.9%, which measures how much profit a company kept from every dollar of total sales.

The company has a debt-to-equity ratio of roughly 0.5x, which compares total debt to shareholders’ equity. Free cash flow for the year was nearly $1.1 billion, calculated by subtracting capital expenditures from cash generated by operations. That’s nearly enough to pay off its $1.38 billion in total debt if management wanted to.

The case for Insulet

Insulet specializes in the Omnipod system, a tubeless insulin pump that simplifies insulin delivery for people with diabetes via a wearable pod. The company serves more than 600,000 global customers and has successfully expanded its presence into approximately 25 countries. It relies on three major distributors, each accounting for 10% or more of revenue, and customer concentration like this adds a layer thiof risk to the business.

During FY 2025, the company generated revenue of just over $2.7 billion, representing a 30.9% increase. Net income for the fiscal year was approximately $354.4 million, despite the competitive nature of the medical technology market. This produced a net margin of close to 10.4% for the period, reflecting its current operational scale.

Insulet maintains a relatively conservative debt-to-equity ratio of approximately 0.8x. As of its December 2025 balance sheet, the current ratio is roughly 2.8x, a measure of the company's ability to cover its short-term debts with its short-term assets. Free cash flow for FY 2025 reached close to $377.7 million, providing the company with capital for further product development.

Risk profile comparison

DexCom faces intense competition from large medical technology firms like Abbott Laboratories and Medtronic. The company is also navigating a March 2025 FDA warning letter concerning manufacturing and quality management system non-conformities at certain facilities. Additionally, the rising popularity of GLP-1 drugs could potentially reduce the overall demand for glucose monitoring sensors.

Insulet depends heavily on its single Omnipod product platform, making it vulnerable to shifts in consumer preferences or technical failures. The company relies on agreements with DexCom and Abbott Laboratories to integrate sensors into its pods, meaning the loss of these partnerships would impair product functionality. It also competes directly with Medtronic and Tandem Diabetes Care in the insulin delivery market.

Valuation comparison

Insulet appears to be the more attractively valued option for investors seeking a lower P/S ratio and a lower Forward P/E relative to future earnings estimates.

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Which stock would I buy in 2026?

While there are general fears that the rise of GLP-1 treatments for diabetes will erode the market for both DexCom and Insulet’s products, the fact of the matter is that millions of people continue to live with diabetes. Many of those are looking for better ways to monitor and treat themselves.

DexCom holds the leadership position for glucose monitoring systems in the United States. It remains a growth market, with management expecting double-digit growth in 2026. The company periodically introduces updated versions of its continuous glucose monitoring device, attracting new users and prompting upgrades from a sizable portion of its existing customer base.

Similarly, Insulet is a leader in automated insulin delivery systems. The Omnipod is a small, wearable device that users can cover with sleeves if they want.

For 2026, Insulet gets the nod for its combination of relative value compared to DexCom, with lower price-to-earnings and price-to-sales ratios, along with the fact that Insulet’s market has plenty of upside.

Insulet management estimates that only 40% to 45% of patients with type 1 diabetes use automated treatment devices. The market for type 2 diabetes treatment has even more potential: just 5% of those patients use an automated device, and the number of type 2 diabetes sufferers is about 30 times the amount of Type 1. Insulet’s current device, Omnipod 5, was only approved to treat Type 2 in 2024, meaning there is plenty of customer education to be done.

Brendan Coffey does not have any position in the stocks mentioned in this story. The Motley Fool has positions in and recommends Abbott Laboratories, Insulet, and Medtronic. The Motley Fool recommends DexCom and recommends the following options: long January 2027 $65 calls on DexCom and short January 2027 $75 calls on DexCom. The Motley Fool has a disclosure policy.