Globus Medical GMED has seen impressive momentum in the past year, with its shares soaring 62.1%. It has significantly outperformed the industry’s 7.3% rise and the S&P 500 composite’s 24.8% gain.

Presently carrying a Zacks Rank #3 (Hold), the renowned medical device company is benefiting from the robust demand for its Musculoskeletal Solutions products. The synergies from its merger with NuVasive run high, with the combined company focusing on rapid innovation, addressing unmet clinical needs and improving offerings to surgeons and patients. A series of innovative product launches also brings optimism to the stock.

Audubon, PA-based Globus Medical, Inc. has an extensive portfolio comprising advanced and differentiated technologies used to treat a variety of musculoskeletal conditions of the spine, extremities and pelvis. The company currently has its sales operations distributed across 51 counties worldwide. With the complementary strengths of Globus Medical engineering and NuVasive relations, education and training, GMED aims to outpace market growth, leading to accelerated EPS growth and an increase in cash flows.

Factors Favoring GMED’s Growth

The rally in the share price can be linked to the company’s market share gain in the musculoskeletal solutions space. Through the past few quarters, Globus Medical has registered above-market growth in the U.S. spine business, driven by combined product offerings, competitive rep recruiting from prior quarters and increased implant usage through robotic pull-through. In the third quarter of 2024, Enabling Technologies revenues grew 39% year over year, driven by increased sales within the U.S. market across the EGPS and E3D products. Globus Medical registered the highest number of Excelsius unit placements since launch.

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Meanwhile, the merger with NuVasive, completed in September 2023, capitalizes on the company’s complementary commercial organization and should allow it to accelerate its globalization strategies to increase customer reach and strengthen surgeon relationships. A key strength of the merger has been the combination of Globus Medical’s trauma and the NuVasive Specialized Orthopedics businesses, which delivered 99% growth in the third quarter. The combined company has committed to achieving $170 million in cost synergies over three years. Internationally, the power of the combined product offerings is expected to fuel major growth in 2025 and beyond.

Innovation remains a key to building long-term growth, with Globus Medical consistently making impactful launches from its research and development pipeline. The third quarter of 2024 saw the company launching four new products, including the ExcelsiusHub navigation system, opening doors to the largest market segment of navigation for the company.

The company also secured the FDA’s 510(k) clearance for ExcelsiusFlex with Total Knee Arthroplasty (TKA) application and ACTIFY 3D Total Knee System. Within trauma, Globus Medical launched the CAPTIVATE SOLA headless compression screw system, a fast and efficient solution for repairing fractures, bone reconstruction, joint fusion, osteotomy and arthrodesis.

Investors are also upbeat about Globus Medical, as the booming musculoskeletal diseases market is expected to drive higher demand for its products. With an aging population and increasing cases of musculoskeletal issues, the company’s core offerings are well-positioned to address this growing need.

Risks for GMED

Like other industry players, Globus Medical is currently affected by negative trends in the global economy, including interest rate fluctuations, rising inflation and financial market volatility, all of which are adversely affecting its operations and financial performance. In particular, growing geopolitical tensions have led to higher raw material and freight costs for the company.

A Glance at GMED’s Estimates

The Zacks Consensus Estimate for Globus Medical’s 2024 and 2025 earnings per share (EPS) is expected to increase 28.5% and 16.4% year over year, respectively, to $2.98 and $3.47. In the past 30 days, the Zacks Consensus Estimate for the company's 2024 EPS has increased by 1 cent.

Revenues for 2024 are projected to grow 59.6% to $2.50 billion, while the same for 2025 is expected to reach $2.67 billion.

Key MedTech Stocks

Some better-ranked stocks in the broader medical space are Veracyte VCYT, Haemonetics HAE and Cardinal Health CAH.

Veracyte has an estimated 2024 earnings growth rate of 37.2% compared with the industry’s 15.3%. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 520.6%. Its shares have risen 53.9% compared with the industry’s 7.3% growth in the past year.

VCYT sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Haemonetics, carrying a Zacks Rank #2 (Buy) at present, has an estimated fiscal 2025 earnings growth rate of 15.9% compared with the industry’s 12.3%. Shares of the company have declined 13.3% against the industry’s 11.7% growth. HAE’s earnings surpassed estimates in three of the trailing four quarters and missed on one occasion, with the average surprise being 2.82%.

Cardinal Health, carrying a Zacks Rank #2 at present, has a long-term estimated earnings growth rate of 10.5%. Shares of the company have surged 19.9% compared with the industry’s 4.6% growth. CAH’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 11.24%.

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