Globus Medical Hits 52-Week High: What's Driving The Stock?
Zacks Investment Research | Dec 10, 2019 07:36AM ET
Shares of Globus Medical, Inc. (NYSE:GMED) reached a new 52-week high of $57.61 on Dec 9, closing the session marginally lower at $57.34. The stock has rallied 8.1% since its third-quarter earnings announcement on Nov 6.
The company’s third-quarter earnings results, backed by robust segmental and global revenue growth, drove the rally. However, escalating expenses and competitive landscape are headwinds.
Let us discuss.
Q3 Performance
The company exited the third quarter on a mixed note, with earnings meeting the Zacks Consensus Estimate and revenues beating the same. The company witnessed year-over-year revenue improvements in both its segments as well as globally, which bodes well.
Globus Medical is upbeat about the solid year-over-year improvement in global spine business. The company is also optimistic about maintaining the upside in implant sales with ExcelsiusGPS technology.
Despite rise in the cost of products sold, the company registered gross profit rise on solid top-line performance that buoyed investors’ optimism.
Other Growth Drivers
Product Launches and Development: Market seems to be optimistic about Globus Medical’s latest launch of the AUTOBAHN Nailing System, which is an all-inclusive platform that provides advanced clinical solutions for fractures of the tibia and femur. With this launch, the company aims to foray further into the trauma market.
Further, the company launched a cadence of products that include Autobahn Tibial Nailing, the ANTHEM Tibia Plating System and the ANTHEM Clavicle Plating System. The company has lined up few launches in the upcoming fourth quarter, including the 3D printed interbody spacer and its next generation expandable TLIF device.
Impressive International Growth: The company’s strong international performance in the third quarter 2019 buoyed optimism. Globus Medical believes this uptick to continue in the upcoming quarter owing to access to new technology, pull through from robotic placements and increased investments in peer-to-peer education.
Strong Growth of Spine arm: Investors are upbeat about the company as it continues to witness higher demand for its Musculoskeletal Solutions products. Within this, the domestic spine business captured a significant market share, courtesy of competitive representative recruiting and an implant pull-through from ExcelsiusGPS installations. Contributions from competitive recruiting also aided growth.
Get The News You Want
Zacks Rank & Key Picks
Currently, Globus Medical carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Haemonetics Corporation (NYSE:HAE) , National Vision Holdings, Inc (NASDAQ:EYE) and ResMed Inc (NYSE:RMD) .
Haemonetics currently has a Zacks Rank #2 (Buy) and a projected long-term earnings growth rate of 13.5%. You can see Zacks Investment Research
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.