Globus Medical returned gains of 7.8% last year, with its stock price reaching a high of $80.04 and a low of $50.92. Over the same period, the stock underperformed the S&P 500 index by -13.0%. As of April 2023, the company's 50-day average price was $56.7. Globus Medical, Inc., a medical device company, develops and commercializes healthcare solutions for patients with musculoskeletal disorders in the United States and internationally. Based in Audubon, PA, the mid-cap Health Care company has 2,600 full time employees. Globus Medical has not offered a dividend during the last year.
An Exceptionally Strong Balance Sheet:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $785 | $789 | $958 | $1,023 |
| Gross Margins | 77.1% | 72.4% | 75.0% | 74.2% |
| Operating Margins | 22.5% | 14.6% | 20.3% | 23.1% |
| Net Margins | 19.76% | 12.96% | 15.57% | 18.59% |
| Net Income (MM) | $155 | $102 | $149 | $190 |
| Net Interest Expense (MM) | 17 | 14 | 9 | 14 |
| Net Interest Expense (MM) | $17 | $14 | $9 | $14 |
| Depreciation & Amort. (MM) | -$53 | -$63 | -$70 | -$68 |
| Earnings Per Share | $1.52 | $1.01 | $1.44 | $1.95 |
| EPS Growth | n/a | -33.55% | 42.57% | 35.42% |
| Diluted Shares (MM) | 102 | 101 | 104 | 80 |
| Free Cash Flow (MM) | $101 | $135 | $219 | $104 |
| Capital Expenditures (MM) | -$71 | -$64 | -$57 | -$74 |
| Net Current Assets (MM) | $558 | $649 | $649 | $754 |
| Current Ratio | 6.17 | 6.8 | 6.17 | 6.18 |
Globus Medical benefits from growing revenues and a flat capital expenditure trend, strong margins with a stable trend, and an excellent current ratio. The company's financial statements show wider gross margins than its peer group and consistent free cash flow. However, the firm has EPS growth acheived by reducing the number of outstanding shares.
A Lower P/B Ratio Than Its Sector Average but Trades Above Its Graham Number:
Globus Medical has a trailing twelve month P/E ratio of 29.1, compared to an average of 24.45 for the Health Care sector. Based on its EPS guidance of $2.62, the company has a forward P/E ratio of 21.6. Globus Medical's PEG ratio is 3.28 on the basis of the 8.9% weighted average of the company and the broader market's EPS compound average growth rates. This suggests that the company's shares are overvalued. In contrast, the market is likely undervaluing Globus Medical in terms of its equity because its P/B ratio is 3.09 while the sector average is 4.16. The company's shares are currently trading 134.2% above their Graham number.
Globus Medical Has an Average Rating of Hold:
The 11 analysts following Globus Medical have set target prices ranging from $60.0 to $77.0 per share, for an average of $67.0 with a hold rating. As of April 2023, the company is trading -15.4% away from its average target price, indicating that there is an analyst consensus of some upside potential.
Globus Medical has an above average percentage of its shares sold short because 10.2% of the company's shares are sold short. Institutions own 99.8% of the company's shares, and the insider ownership rate stands at 1.08%, suggesting a small amount of insider investors. The largest shareholder is the Vanguard Group, Inc., whose 8% stake in the company is worth $445,517,481.
