Globus Medical (GMED Quick QuoteGMED - Free Report) continues to gain from surging demand for its Musculoskeletal Solutions products. However, the challenging macroeconomic scenario continues to plague Globus Medical. The stock currently carries a Zacks Rank #3 (Hold).

Factors Driving GMED's Shares

Globus Medical is gaining market share in the musculoskeletal solutions space, banking on the strong performance of its implantable devices, biologics, accessories and unique surgical instruments used in an expansive range of spinal, orthopedic and neurosurgical procedures. The company is particularly seeing notable gains across its product portfolio in expandables, biologics, MIS screws, 3D printed implants and cervical offerings.

In the fourth quarter, Globus Medical's musculoskeletal sales improved 4.5% year over year. The growth was driven primarily by strong contributions from the company’s international spine business and a 43.5% increase in global Enabling Technologies revenues. GMED is also optimistic about the recently-inked deal to acquire Nevro Corporation. The acquisition of Nevro is expected to expand Globus Medical’s reach into the musculoskeletal market, adding an additional $2 billion market space in this niche.

During the fourth quarter of 2024, the company launched five new products. Among the launches, we should mention the QUARTEX MIS system, which offers a percutaneous solution designed to minimize disruption in the posterior cervical and upper thoracic spine. There is also the ALLEGIANCE Retractor System, a ringless interior exposure system designed for quick setup, precise tissue retraction and maximum rigidity. In addition, the company launched the ExcelsiusFlex robotic navigation platform and the ACTIFY Unicondylar Knee System in the fourth quarter.

GMED currently awaits a strong cadence of product launches throughout the Musculoskeletal portfolio in the coming months of 2025. The company's high R&D spending trend is indicative of a healthy pipeline. We estimate the company's R&D expense to increase 11.2% in 2025.

Globus Medical, Inc. Price

Globus Medical, Inc. price | Globus Medical, Inc. Quote

Globus Medical merged its business with NuVasive. The combined company has formed a global musculoskeletal company focused on rapid innovation, addressing unmet clinical needs, and improving offerings to surgeons and patients. The combination capitalizes on GMED’s complementary commercial organization and should allow the company to accelerate its globalization strategies to increase customer reach and strengthen surgeon relationships.

At the end of the fourth quarter, Globus Medical noted that NuVasive Integration is progressing well. The combined company exceeded its 2024 collaboration targets and was able to accelerate value creation and shareholder return as a result. For the second year’s synergies, the company is successfully implementing common systems in the international markets, expanding its in-house production for NuVasive implants, consolidating the external vendors and utilizing its existing product offerings to drive cross-selling.

Over the past three months, shares of GMED have lost 12% compared with the industry’s 3.8% decline. The company is experiencing a high level of synergy from NuVasive business integration. With its consistent focus on strategic market expansion and new product launches, we expect the stock to regain its momentum in the coming days.

Concerning Factors for GMED

Like other industry players, Globus Medical is currently grappling with negative trends in the global economy, including interest rate fluctuations, increases in inflation and financial market volatility. These factors are adversely affecting the company’s operations and financial performance. The increasing geopolitical complexities across the globe, in particular, have led to a significant rise in raw material and freight costs for the company. In 2024, the company incurred an 88.9% surge in the cost of goods sold. The macroeconomic factors, along with the rising wage and raw material costs, are also leading to a significant escalation in the company’s operating expenses. SG&A expenses in 2024 were up 52.5% from the year-ago quarter.

Further, the presence of a large number of players made the musculoskeletal devices market intensely competitive. The orthopedic industry, in particular, is highly competitive with the presence of more prominent players like Zimmer Biomet, Stryker, Johnson & Johnson’s DePuy, Smith & Nephew and Medtronic. Globus Medical needs to constantly introduce or acquire new products to withstand the competitive pressure and maintain its market share.

Key Picks

Some better-ranked stocks in the broader medical space are Veracyte (VCYT Quick QuoteVCYT - Free Report) , ResMed (RMD Quick QuoteRMD - Free Report) and Omnicell (OMCL Quick QuoteOMCL - Free Report) .

Veracyte, carrying a Zacks Rank #1 (Strong Buy) at present, has an estimated earnings growth rate of 65.8% for 2025. You can see the complete list of today’s Zacks #1 Rank stocks here.

VCYT’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 520.58%. Veracyte’s shares have risen 49.2% in the past year compared with the industry’s 5.5% growth.

ResMed, carrying a Zacks Rank #2 at present, has an estimated growth rate of 21.1% for 2025. RMD’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 6.41%. Its shares have risen 34.1% compared with the industry’s 7.7% growth in the past year.

Omnicell, carrying a Zacks Rank #2 at present, has an estimated earnings growth rate of 72.7% for the fourth quarter of 2024. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 121.74%. OMCL’s shares have risen 26.4% against the industry’s 15.7% decline in the past year.