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Globus Medical (GMED)
NYSE:GMED
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Globus Medical
(NYSE:GMED)
75Outperform
Positive Factors
Financial Performance
GMED finished the year strong, beating on both the top and bottom lines and generating record free cash flow.
Product Launches
GMED has remained on the offensive, pointing to a year with a record number of new product launches and more launches planned for the future.
Regulatory Approval
GMED's ExcelsiusFlex robotic system received FDA clearance for total knee arthroplasty, indicating regulatory approval and potential market entry.
Negative Factors
Acquisition Impact
The new NVRO deal will be dilutive in the first year likely due to SG&A spend.
Earnings Impact
The Nevro transaction initially results in an adjusted EPS dilution of $0.20 but is expected to be accretive in the second year.
Stock Performance
GMED shares are down 9% since the announcement two weeks ago.
Globus Medical (GMED) vs. S&P 500 (SPY)
Market Cap
$11.32B
Dividend YieldN/A
Average Volume (3M)1.36M
Price to Earnings (P/E)92.2
Beta (1Y)0.89
Revenue Growth60.62%
EPS Growth-35.88%
CountryUS
Employees5,300
SectorHealthcare
Sector Strength78
IndustryMedical - Devices
Share Statistics
EPS (TTM)0.74
Shares Outstanding137,541,640
10 Day Avg. Volume1,292,441
30 Day Avg. Volume1,356,939
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)4.02
Price to Cash Flow (P/CF)12.00
P/FCF Ratio12.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$98.75Price Target Upside43.87% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
Globus Medical Business Overview & Revenue Model
Company DescriptionGlobus Medical, Inc., a medical device company, develops and commercializes healthcare solutions for patients with musculoskeletal disorders in the United States and internationally. It offers spine products, such as traditional fusion implants comprising pedicle screw and rod systems, plating systems, intervertebral spacers, and corpectomy devices for treating degenerative, deformity, tumors, and trauma conditions; treatment options for motion preservation technologies that consist of dynamic stabilization, total disc replacement, and interspinous distraction devices; interventional pain management solutions to treat vertebral compression fractures; and regenerative biologic products comprising of allografts and synthetic alternatives. The company also offers products for the treatment of orthopedic trauma, including fracture plates, compression screws, intramedullary nails, and external fixation systems; and hip and knee joint solutions, including modular hip stems and acetabular cups, as well as posterior stabilizing and cruciate retaining knee arthroplasty implants. In addition, it distributes human cell, tissue, and cellular and tissue-based products. Globus Medical, Inc. was incorporated in 2003 and is headquartered in Audubon, Pennsylvania.
How the Company Makes MoneyGlobus Medical generates revenue primarily through the sale of its diverse range of medical devices and solutions to hospitals, surgery centers, and healthcare providers. The company's key revenue streams come from its spinal implant products, which include a variety of implants and instruments designed for minimally invasive surgery, as well as its trauma and orthopedic product lines. Additionally, Globus Medical invests in research and development to continuously innovate and expand its product offerings. Strategic partnerships with healthcare providers and distributors also play a significant role in expanding the company's market reach and driving sales. Globus Medical's ability to maintain strong relationships with its clients and provide high-quality, reliable products is crucial to its financial success.
Globus Medical Financial Statement Overview
Summary
Globus Medical shows strong financial performance with robust revenue growth and solid cash flow generation. The company maintains a conservative financial structure with low leverage, reducing financial risk. While profitability margins face pressure, the strong equity base and cash flow generation provide a solid foundation for future growth.Income Statement
Globus Medical has demonstrated strong revenue growth, increasing from $789 million in 2020 to $2.52 billion in 2024. The gross profit margin is consistently high, reflecting efficient cost management. However, net profit margins have decreased due to higher operating expenses, suggesting potential areas for cost optimization.85
Very Positive
Balance Sheet
The balance sheet is robust with a significant increase in stockholders' equity, reaching $4.18 billion in 2024. The debt-to-equity ratio is low, indicating low financial leverage, which mitigates risk. However, a decrease in ROE from prior years indicates reduced profitability relative to equity.80
Positive
Cash Flow
Operating cash flow has improved significantly, enhancing liquidity. Free cash flow has grown robustly, supporting investment in capital expenditures. However, the free cash flow to net income ratio shows room for improvement, suggesting that cash generation relative to profits could be optimized.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.52B | 1.57B | 1.02B | 958.10M | 789.04M | Gross Profit |
| 1.48B | 1.02B | 759.12M | 718.88M | 571.58M | EBIT |
| 165.99M | 133.14M | 227.95M | 171.95M | 111.43M | EBITDA |
| 473.73M | 346.58M | 304.50M | 250.28M | 178.35M | Net Income Common Stockholders |
| 102.98M | 122.87M | 190.17M | 149.19M | 102.28M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 890.06M | 517.79M | 446.06M | 443.45M | 426.74M | Total Assets |
| 5.25B | 5.09B | 2.08B | 1.96B | 1.68B | Total Debt |
| 537.19M | 520.40M | 6.01M | 5.05M | 4.80M | Net Debt |
| -247.25M | 53.11M | -144.46M | -188.02M | -234.60M | Total Liabilities |
| 1.07B | 1.09B | 229.75M | 215.88M | 173.19M | Stockholders Equity |
| 4.18B | 4.00B | 1.85B | 1.74B | 1.51B |
| Cash Flow | Free Cash Flow | |||
| 405.21M | 165.22M | 104.42M | 219.38M | 135.13M | Operating Cash Flow |
| 520.64M | 243.50M | 178.47M | 276.27M | 198.79M | Investing Cash Flow |
| -176.05M | 302.97M | -110.36M | -375.94M | -117.32M | Financing Cash Flow |
| -27.70M | -231.82M | -109.96M | 54.15M | -38.66M |
Globus Medical Technical Analysis
Negative
68.64
Price Trends
79.42
Negative
82.18
Negative
76.79
Negative
Market Momentum
-1.92
Negative
41.00
Neutral
37.61
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GMED, the sentiment is Negative. The current price of 68.64 is below the 20-day moving average (MA) of 72.61, below the 50-day MA of 79.42, and below the 200-day MA of 76.79, indicating a bearish trend. The MACD of -1.92 indicates Negative momentum. The RSI at 41.00 is Neutral, neither overbought nor oversold. The STOCH value of 37.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GMED.
Globus Medical Risk Analysis
Globus Medical disclosed 52 risk factors in its most recent earnings report. Globus Medical reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Globus Medical Peers Comparison
Overall Rating
UnderperformOutperform
Sector (48)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $11.00B | 27.17 | 7.82% | 2.81% | 4.58% | 55.99% | |
78 Outperform | $20.90B | 45.12 | 9.61% | 1.05% | -0.17% | -17.34% | |
75 Outperform | $11.32B | 92.21 | 2.52% | ― | 60.62% | -35.88% | |
73 Outperform | $20.87B | 23.65 | 7.24% | 0.92% | 3.84% | -9.29% | |
56 Neutral | $1.92B | 29.48 | 4.87% | ― | 8.33% | 256.54% | |
51 Neutral | $560.36M | ― | -22.87% | ― | 7.08% | 20.45% | |
48 Neutral | $6.27B | 1.17 | -48.19% | 2.68% | 17.28% | 1.24% |
* Healthcare Sector Average
Performance Comparison
GMED
Globus Medical
68.64
15.53
29.24%
OFIX
Orthofix
14.72
1.07
7.84%
SNN
Smith & Nephew Snats
25.85
2.10
8.84%
STE
Steris
222.94
15.79
7.62%
ZBH
Zimmer Biomet Holdings
103.44
-23.16
-18.29%
LIVN
LivaNova
35.72
-19.52
-35.34%
Globus Medical Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: -18.40% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Positive
Globus Medical reported a strong financial performance with record revenue and growth, successful product launches, and impressive enabling technology sales. The company is achieving significant synergies from the NuVasive merger and is on track to become debt-free. However, there were some challenges, including supply chain disruptions and foreign exchange headwinds. Overall, the sentiment is positive due to the outweighing highlights.Highlights
Record-Breaking Revenue and Growth
Globus Medical achieved a record revenue of $2.519 billion for the full year 2024, indicating a 61% increase compared to the prior year.
Strong Financial Performance
Non-GAAP EPS increased by 31%, reaching a record $3.04 despite a 20% increase in diluted shares. Free cash flow hit an all-time high of $405 million, a 145% increase from the previous year.
Successful Product Launches
Globus launched 18 new products in 2024, including innovative surgical systems like QUARTEX MIS and ALLEGIANCE Retractor System, demonstrating a strong push in innovation.
Impressive Q4 Performance
Q4 sales reached $657 million, marking a 7% increase versus the prior year. Non-GAAP EPS increased by 40% to $0.84.
Enabling Technology Growth
Q4 enabling technology sales were $47 million, a 44% increase over the prior year, with a 47% increase in unit placements.
Debt-Free Status Achieved
The company plans to return to a debt-free status by the end of Q1 2025 by paying off $1 billion of debt from the NuVasive merger.
International Growth
The international spine implant business delivered 13% sales growth on a constant currency basis, driven by strong performance in Japan, UK, Italy, and Ireland.
Lowlights
Supply Chain Disruption
The trauma and NSO business growth was partially offset by a temporary supply chain disruption.
Foreign Exchange Headwinds
Non-GAAP EPS faced a $0.10 headwind and adjusted EBITDA faced a 0.72% unfavorable impact due to foreign currency loss.
Neuromonitoring Revenue Decline
Lower neuromonitoring revenue was reported due to lower net revenue per case.
Challenges in R&D Spending
R&D expenses decreased as a percentage of sales due to headcount savings and cost synergies, but the total dollar spending increased due to the inclusion of NuVasive expenses.
Company Guidance
During the fourth quarter and full year 2024 earnings call, Globus Medical provided guidance on several key financial metrics. The company achieved record full-year revenue of $2.519 billion, a 61% increase over the prior year, and a non-GAAP EPS of $3.04, up 31% despite a 20% increase in diluted shares. Q4 revenue was $657 million, a 7% increase year-over-year, with non-GAAP EPS rising 40% to $0.84. The company reported a record free cash flow of $405 million for the year, a 145% increase, and $193 million for Q4, up 136%. For 2025, Globus projects standalone revenue between $2.66 billion and $2.69 billion, with non-GAAP EPS ranging from $3.40 to $3.50. Following the expected acquisition of Nevro Corp., which should close in late Q2 2025, anticipated 2025 revenue is adjusted to a range of $2.8 billion to $2.9 billion, with non-GAAP EPS of $3.10 to $3.40. The company also highlighted their success with product launches, including 18 new products in 2024, and expressed confidence in their strategic focus on integration, synergy capture, and future growth through innovation and operational excellence.Globus Medical Corporate Events
M&A TransactionsBusiness Operations and Strategy
Globus Medical Completes Acquisition of Nevro Corp.
Positive
Apr 3, 2025
On April 3, 2025, Globus Medical completed its acquisition of Nevro Corp., a global medical device company specializing in chronic pain solutions. This strategic acquisition, which positions Globus to expand its presence in the musculoskeletal market, unlocks a $2 billion market opportunity and aims to enhance the company’s product portfolio in the neuromodulation space.
M&A TransactionsBusiness Operations and Strategy
Globus Medical Announces Acquisition of Nevro Corp
Positive
Feb 6, 2025
On February 6, 2025, Globus Medical announced its acquisition of Nevro Corp. in an all-cash transaction valued at approximately $250 million, with each Nevro share priced at $5.85. This strategic acquisition, approved by both companies’ boards, aims to expand Globus Medical’s market presence and enhance its capabilities in neuromodulation and pain management technologies. Globus Medical anticipates the transaction will close by the second quarter of 2025, subject to regulatory and shareholder approvals. The acquisition aligns with Globus’s mission to grow within the musculoskeletal technology sector, potentially accelerating market penetration of Nevro’s technologies and improving financial performance to create long-term value.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.