Globus Medical Stock To $109?

Globus Medical (GMED) stock has jumped 36% during the past day, and is currently trading at $83.89. Our multi-factor assessment suggests that it may be time to buy more shares of GMED stock. We have, overall, a positive view of the stock, and a price of $109 may not be out of reach. We believe there is not much to fear in GMED stock given its overall Strong operating performance and financial condition. Considering stock’s Moderate valuation, we think it is Attractive.

Below is our assessment:

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Let’s get into details of each of the assessed factors but before that, for quick background: With $11 Bil in market cap, Globus Medical provides healthcare solutions for musculoskeletal disorders and orthopedic trauma, including fracture plates, compression screws, intramedullary nails, and external fixation systems.

[1] Valuation Looks Moderate

This table highlights how GMED is valued vs broader market. For more details see: GMED Valuation Ratios

[2] Growth Is Very Strong

• Globus Medical has seen its top line grow at an average rate of 45.6% over the last 3 years
• Its revenues have grown 12% from $2.5 Bil to $2.8 Bil in the last 12 months
• Also, its quarterly revenues grew 22.9% to $769 Mil in the most recent quarter from $626 Mil a year ago.

This table highlights how GMED is growing vs broader market. For more details see: GMED Revenue Comparison

[3] Profitability Appears Moderate

• GMED last 12 month operating income was $434 Mil representing operating margin of 15.7%
• With cash flow margin of 25.8%, it generated nearly $715 Mil in operating cash flow over this period
• For the same period, GMED generated nearly $424 Mil in net income, suggesting net margin of about 15.3%

This table highlights how GMED profitability vs broader market. For more details see: GMED Operating Income Comparison

[4] Financial Stability Looks Strong

• GMED Debt was $119 Mil at the end of the most recent quarter, while its current Market Cap is $11 Bil. This implies Debt-to-Equity Ratio of 1.1%
• GMED Cash (including cash equivalents) makes up $391 Mil of $5.1 Bil in total Assets. This yields a Cash-to-Assets Ratio of 7.7%

[5] Downturn Resilience Is Weak

GMED has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• GMED stock fell 47.9% from a high of $84.06 on 8 September 2021 to $43.79 on 13 November 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 21 November 2024
• Since then, the stock increased to a high of $93.32 on 22 January 2025 , and currently trades at $83.89

 
2020 Covid Pandemic

• GMED stock fell 41.0% from a high of $59.45 on 2 January 2020 to $35.06 on 16 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• The stock is yet to recover to its pre-Crisis high

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.