Is Wall Street Underestimating Globus Medical Stock’s Potential?
Here is why we think Globus Medical (GMED) stock deserves consideration as a value stock. It is currently trading nearly 33% below its 1 year high, and also trading at a PS multiple which is below the average for the last 3 years. However, it has reasonable fundamentals for its level of valuation.
- Reasonable Revenue Growth: 17.4% LTM and 44.7% last 3 year average.
- Cash Generative: Nearly 19.9% free cash flow margin and 13.2% operating margin LTM.
- No Major Margin Shocks: Globus Medical has avoided any margin collapse in the last 12 months.
- Modest Valuation: Despite encouraging fundamentals, GMED stock trades at a PE multiple of 23.8
- Opportunity vs S&P: Compared to S&P, you get lower valuation, higher revenue growth, but lower margins
As a quick background, Globus Medical provides healthcare solutions for musculoskeletal disorders and orthopedic trauma treatment, including fracture plates, compression screws, intramedullary nails, and external fixation systems worldwide.
Single stock can be risky, but there is a huge value to a broader diversified approach. Strategic asset allocation and diversification helps you stay invested. Did you know investors who panicked out of the S&P in 2020 lost significant upside that followed? Trefis High Quality Portfolio and Empirical Asset Management’s asset allocation approach are designed to reduce volatility so you can stay the course.
| GMED | S&P Median | |
|---|---|---|
| Sector | Health Care | – |
| Industry | Health Care Equipment | – |
| PE Ratio | 23.8 | 24.5 |
|
|
||
| LTM* Revenue Growth | 17.4% | 5.2% |
| 3Y Average Annual Revenue Growth | 44.7% | 5.3% |
| LTM Operating Margin Change | 5.7% | 0.3% |
|
|
||
| LTM* Operating Margin | 13.2% | 18.6% |
| 3Y Average Operating Margin | 14.4% | 17.8% |
| LTM* Free Cash Flow Margin | 19.9% | 13.2% |
*LTM: Last Twelve Months
- What To Expect From Johnson & Johnson Stock?
- What To Expect From Microsoft Stock?
- The Smart Way to Own ANET: Collect 10% Before You Even Buy
- Triggers That Could Ignite the Next Rally In Meta Platforms Stock
- Can Coca-Cola Stock Withstand These Pressures?
- Fiserv Stock: Strong Cash Flow Poised for a Re-Rating?
But do these numbers tell the full story? Read Buy or Sell GMED Stock to see if Globus Medical still has an edge that holds up under the hood.
Stocks Like These Can Outperform. Here Is Data
Below are statistics for stocks with same selection strategy applied between 12/31/2016 and 6/30/2025.
- Average 6-month and 12-month forward returns of 12.7% and 25.8% respectively
- Win rate (percentage of picks returning positive) of > 70% for both 6-month and 12-month periods
- Not over dependent on market crashes. During non-crash periods as well, this strategy has 12-month average return of nearly 20% with 67% win rate.
But Consider The Risk
GMED isn’t immune to big drops either. It fell about 34% during the 2018 correction, took a 41% hit in the Covid pandemic, and dropped nearly 48% in the inflation shock. Even with good fundamentals, these dips show the stock can get hit hard when the market turns. Strong businesses still face tough sell-offs in turbulent times.
But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read GMED Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.