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Globus Medical (GMED) Hits 52-Week High: What's Driving It?
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Shares of Globus Medical (GMED - Free Report) reached a new 52-week high of $67.37 on May 22 before closing the session marginally lower at $67.15.
In the past year, this Zacks Rank #3 (Hold) stock has rallied 25.8% compared with the 12.1% growth of the industry and the S&P 500 composite’s rise of 29.5%.
Globus Medical has an expected 2024 sales growth rate of 57.8%. Earnings for the year are projected to increase by 20.7% compared with the industry’s 13.3%. The company topped earnings estimates in each of the trailing four quarters, the average beat being 10.8%.
Globus Medical is witnessing an upward trend in its stock price, prompted by the strategic NuVasive merger. The optimism led by the robust 2024 first-quarter performance, as well as a rapid cadence of product launches, is expected to contribute to the growth. However, the company faces concerns over adverse macroeconomic impacts and low demand for healthcare products.
Let’s delve deeper.
Key Growth Drivers
NuVasive Merger, a Strategic One: Globus Medical’s merger with NuVasive aims to form a global musculoskeletal company focused on rapid innovation, addressing unmet clinical needs and enhancing offerings to surgeons and patients. The combination leverages GMED’s complementary commercial organization, speeding up its globalization strategies to reach more customers and build stronger ties with surgeons.
Earlier in January this year, Globus Medical implemented the realigned U.S. and international sales team structure to support surgeons worldwide. During the first quarter, Globus and NuVasive field organizations were integrated into a unified team, rolling out new reporting structures globally, combining product portfolios to create best-in-class offerings to the surgeons, reorganizing support organizations, implementing common systems and initiating efforts to unlock synergies for future growth.
Image Source: Zacks Investment Research
In particular, the combined company is putting efforts into driving further development of the legacy NuVasive customers into the EGPS or Excelsius portfolio. Globus Medical believes this cross-selling activity will bring in significant growth through 2024 and beyond.
Q1 Performance: Globus Medical delivered a robust top and bottom-line improvement in the first quarter of 2024, surpassing their respective estimates. The U.S Spine business’ exceptional growth is attributed to the strength of the combined Globus-NuVasive product line, competitive rep recruiting from prior quarters and increased implant usage through robotic pull-through.
Enabling Technologies marked its highest Q1 since launch, driven by higher robotic and imaging system sales. The company made significant progress during the quarter in driving cost synergies. Additionally, a raised 2024 outlook buoys optimism.
Steady Pace of Product Development: Globus Medical is consistently making R&D efforts to focus on its integrated product development. Following NuVasive integration, the cadence of product launches has significantly accelerated. Among the recent meaningful launches, DuraPro and VERZA represent the company’s initial entries into the power tools market. These systems also greatly complement their enabling best-in-class robotic navigation, musculoskeletal implant solutions, comprehensive biomaterial offerings and interoperative imaging tools.
Within Spine, the company launched the Reline 3D system for complex spinal deformity. Globus’ latest evolution in complex spine reducer technology is said to perfectly augment its Reline platform. The new ADIRA Aflex Plate system, introduced in February, provides a rigid coupling to a variety of interbody spacers to enhance construct stability and promote repeatable placement.
In Trauma, Globus’ new ANTHEM Distal Radius system has received encouraging clinical feedback so far and has had a strong start since its introduction. The company is gearing up for several product launches in the Musculoskeletal portfolio in the coming months of 2024.
Downsides
Macroeconomic Concerns Curb Profit: Like other industry players, Globus Medical is facing challenges from global economy trends, including interest rate fluctuations, rising inflation and financial market volatility. These factors are impacting the company’s operations and financial performance. Geopolitical complexities have escalated the raw material and freight costs for the company. Moreover, these macroeconomic factors are also leading to higher operational expenses.
Lower Demand for Healthcare Products: Globus Medical is persistently challenged by soft demand for healthcare products. Additionally, weak reimbursements for medical products and services may impose downward pressure on the prices of the company’s products, longer sales cycles and the slower adoption of new technologies, which will ultimately impact the top line. Healthcare industry consolidation could lead to demands for price concessions or exclude suppliers from certain of the company’s markets, causing an adverse effect.
Hims & Hers Health, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated 2024 earnings growth rate of a staggering 263.6% compared with the industry’s 16.8%. HIMS’ earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 79.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Hims & Hers Health shares have surged 83.5% against the industry’s 23% decline in the past year.
Medpace, also sporting a Zacks Rank #1 at present, has an estimated 2024 earnings growth rate of 27.1% compared with the industry’s 13.8%. MEDP’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 12.8%.
Shares of MEDP have surged 92.4% compared with the industry’s 7.2% growth over the past year.
ResMed, carrying a Zacks Rank #2 (Buy) at present, has an estimated fiscal 2024 earnings growth rate of 18.6% compared with the industry’s 14.9%. RMD’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 2.8%.
Shares of the company have fallen 1% against the industry’s 2.1% rise over the past year.
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Globus Medical (GMED) Hits 52-Week High: What's Driving It?
Shares of Globus Medical (GMED - Free Report) reached a new 52-week high of $67.37 on May 22 before closing the session marginally lower at $67.15.
In the past year, this Zacks Rank #3 (Hold) stock has rallied 25.8% compared with the 12.1% growth of the industry and the S&P 500 composite’s rise of 29.5%.
Globus Medical has an expected 2024 sales growth rate of 57.8%. Earnings for the year are projected to increase by 20.7% compared with the industry’s 13.3%. The company topped earnings estimates in each of the trailing four quarters, the average beat being 10.8%.
Globus Medical is witnessing an upward trend in its stock price, prompted by the strategic NuVasive merger. The optimism led by the robust 2024 first-quarter performance, as well as a rapid cadence of product launches, is expected to contribute to the growth. However, the company faces concerns over adverse macroeconomic impacts and low demand for healthcare products.
Let’s delve deeper.
Key Growth Drivers
NuVasive Merger, a Strategic One: Globus Medical’s merger with NuVasive aims to form a global musculoskeletal company focused on rapid innovation, addressing unmet clinical needs and enhancing offerings to surgeons and patients. The combination leverages GMED’s complementary commercial organization, speeding up its globalization strategies to reach more customers and build stronger ties with surgeons.
Earlier in January this year, Globus Medical implemented the realigned U.S. and international sales team structure to support surgeons worldwide. During the first quarter, Globus and NuVasive field organizations were integrated into a unified team, rolling out new reporting structures globally, combining product portfolios to create best-in-class offerings to the surgeons, reorganizing support organizations, implementing common systems and initiating efforts to unlock synergies for future growth.
Image Source: Zacks Investment Research
In particular, the combined company is putting efforts into driving further development of the legacy NuVasive customers into the EGPS or Excelsius portfolio. Globus Medical believes this cross-selling activity will bring in significant growth through 2024 and beyond.
Q1 Performance: Globus Medical delivered a robust top and bottom-line improvement in the first quarter of 2024, surpassing their respective estimates. The U.S Spine business’ exceptional growth is attributed to the strength of the combined Globus-NuVasive product line, competitive rep recruiting from prior quarters and increased implant usage through robotic pull-through.
Enabling Technologies marked its highest Q1 since launch, driven by higher robotic and imaging system sales. The company made significant progress during the quarter in driving cost synergies. Additionally, a raised 2024 outlook buoys optimism.
Steady Pace of Product Development: Globus Medical is consistently making R&D efforts to focus on its integrated product development. Following NuVasive integration, the cadence of product launches has significantly accelerated. Among the recent meaningful launches, DuraPro and VERZA represent the company’s initial entries into the power tools market. These systems also greatly complement their enabling best-in-class robotic navigation, musculoskeletal implant solutions, comprehensive biomaterial offerings and interoperative imaging tools.
Within Spine, the company launched the Reline 3D system for complex spinal deformity. Globus’ latest evolution in complex spine reducer technology is said to perfectly augment its Reline platform. The new ADIRA Aflex Plate system, introduced in February, provides a rigid coupling to a variety of interbody spacers to enhance construct stability and promote repeatable placement.
In Trauma, Globus’ new ANTHEM Distal Radius system has received encouraging clinical feedback so far and has had a strong start since its introduction. The company is gearing up for several product launches in the Musculoskeletal portfolio in the coming months of 2024.
Downsides
Macroeconomic Concerns Curb Profit: Like other industry players, Globus Medical is facing challenges from global economy trends, including interest rate fluctuations, rising inflation and financial market volatility. These factors are impacting the company’s operations and financial performance. Geopolitical complexities have escalated the raw material and freight costs for the company. Moreover, these macroeconomic factors are also leading to higher operational expenses.
Lower Demand for Healthcare Products: Globus Medical is persistently challenged by soft demand for healthcare products. Additionally, weak reimbursements for medical products and services may impose downward pressure on the prices of the company’s products, longer sales cycles and the slower adoption of new technologies, which will ultimately impact the top line. Healthcare industry consolidation could lead to demands for price concessions or exclude suppliers from certain of the company’s markets, causing an adverse effect.
Key Picks
Some better-ranked stocks in the broader medical space are Hims & Hers Health (HIMS - Free Report) , Medpace (MEDP - Free Report) and ResMed (RMD - Free Report) .
Hims & Hers Health, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated 2024 earnings growth rate of a staggering 263.6% compared with the industry’s 16.8%. HIMS’ earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 79.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Hims & Hers Health shares have surged 83.5% against the industry’s 23% decline in the past year.
Medpace, also sporting a Zacks Rank #1 at present, has an estimated 2024 earnings growth rate of 27.1% compared with the industry’s 13.8%. MEDP’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 12.8%.
Shares of MEDP have surged 92.4% compared with the industry’s 7.2% growth over the past year.
ResMed, carrying a Zacks Rank #2 (Buy) at present, has an estimated fiscal 2024 earnings growth rate of 18.6% compared with the industry’s 14.9%. RMD’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 2.8%.
Shares of the company have fallen 1% against the industry’s 2.1% rise over the past year.