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On Friday, BTIG analyst Ryan Zimmerman revised the price target for Globus Medical (NYSE:GMED) stock, lowering it to $77.00 from the previous $88.00, while still endorsing the stock with a Buy rating. Currently trading at $72.46, the company maintains a "GREAT" financial health score according to InvestingPro data. This adjustment follows the company’s release of its first quarter 2025 financial results, which did not meet analyst expectations.
Globus Medical reported a slight year-over-year decline in revenue, generating approximately $598.1 million, down by 1.4%, and an adjusted earnings per share (EPS) of $0.68, falling short of the projected $625.9 million in revenue and $0.74 EPS. Despite the quarterly decline, the company has achieved impressive 32.26% revenue growth over the last twelve months, maintaining a robust gross margin of 69.18%. The revenue shortfall was attributed to a combination of factors including reduced sales of wound care products, delayed neuromonitoring reimbursements, challenges with supply chain integration, and extended sales cycles in their Enabling Technology segment.
Despite the lower-than-anticipated performance in the first quarter, Globus Medical has maintained its revenue forecast for the fiscal year 2025, anticipating between $2.8 billion and $2.9 billion. However, the company has slightly decreased its adjusted EPS guidance to a range of $3.00 to $3.30, down from the previously estimated $3.10 to $3.40. This revision is partly due to the earlier than expected closure of its acquisition of Nevro.
Zimmerman’s commentary highlighted the debate likely to ensue following the quarter’s results, questioning whether the underperformance was a temporary setback or a sign of deeper issues stemming from rapid mergers and acquisitions. The analyst also pondered the potential for top-line growth and the extent to which expenses could be reduced at Nevro without adversely affecting sales.
The report also noted that Globus Medical had fully utilized its share repurchase authorization and suggested that the company would likely focus on rebuilding its cash reserves before considering a new repurchase program. Zimmerman concluded by stating that if Globus Medical’s shares were to open below $60, the valuation would appear too low for a company with its profit and loss profile, trading at less than three times sales and around ten times EBITDA. InvestingPro analysis suggests the stock is currently undervalued, with additional metrics and insights available in the comprehensive Pro Research Report, which provides deep-dive analysis of this and 1,400+ other US stocks.
In other recent news, Globus Medical reported a miss on both earnings and revenue forecasts for the first quarter of 2025. The company posted an earnings per share (EPS) of $0.68, falling short of the expected $0.75, and revenue of $598.1 million, below the anticipated $631.09 million. Despite these setbacks, Globus Medical achieved a record free cash flow of $141.2 million, marking a 493% increase year-over-year. The company also reaffirmed its full-year revenue guidance while slightly lowering its EPS forecast due to the earlier than expected closure of the Nevro Corp (NYSE:NVRO). acquisition. Analyst firm Stifel revised its price target for Globus Medical to $70 from $94, maintaining a Buy rating, indicating a positive outlook despite the lowered target. Stifel noted that the company’s challenges were largely due to supply chain disruptions and integration issues following recent mergers. Globus Medical’s strategic moves included launching new products and acquiring Nevro for $250 million, aiming to bolster its position in the neuromodulation market. Investors and analysts are closely watching the company’s performance in upcoming quarters for signs of recovery and stability.
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