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On Thursday, Canaccord Genuity maintained a Buy rating with a $101.00 price target for Globus Medical (NYSE:GMED) shares, which currently trades at $88.54. The firm’s analysis supports the company’s ongoing strategy, particularly in the wake of its acquisition of Nevro Corp (NYSE:NVRO). Canaccord Genuity expressed confidence in Globus Medical’s operational progress and its ability to continue releasing new products, especially within its expanding orthopedic segment. According to InvestingPro data, analyst targets range from $85 to $115, with multiple analysts recently revising earnings estimates upward.
The analyst highlighted the significance of the recent acquisition of Nevro Corp, viewing it as a strategic move that places Globus Medical in line with other major companies like Stryker (NYSE:SYK) and Boston Scientific (NYSE:BSX), which have also made similar strategic acquisitions. The acquisition of Nevro Corp is expected to bolster Globus Medical’s presence in the interventional pain market, which is becoming increasingly relevant to the sacroiliac (SI) joint space. The company’s strong financial position, with a healthy current ratio of 2.51 and moderate debt levels, supports this strategic expansion.
Globus Medical’s acquisition is seen as a way to leverage its commercial team and resources to drive growth in the interventionalist channel. Nevro Corp’s Spinal Cord Stimulation (SCS) platform and SI-joint product are poised to complement Globus Medical’s current offerings, providing a more comprehensive solution in the SI-joint fusion space.
The deal, despite being priced at a premium to Nevro’s current stock price, is considered by Canaccord Genuity to be financially attractive for Globus Medical, with a valuation implication of 0.44 times from GMED’s perspective. The acquisition is not only expected to enhance Globus Medical’s commercial footprint in a key market segment but also to expand the company’s product portfolio with the addition of SCS offerings.
In conclusion, Canaccord Genuity reaffirmed its positive outlook on Globus Medical, citing the proposed acquisition of Nevro Corp as a strategic move that aligns with the company’s growth and expansion goals. The analyst’s comments underscore a belief in the company’s ability to capitalize on new opportunities and maintain a strong position in the orthopedic and interventional pain markets. InvestingPro analysis reveals the company’s impressive 75.3% return over the past year and strong gross profit margin of 67.05%. For deeper insights into GMED’s valuation and growth prospects, access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Globus Medical has announced its plans to acquire Nevro Corp for approximately $250 million in cash. This acquisition is expected to be completed by the end of the second quarter of 2025. The move is anticipated to dilute Globus Medical’s earnings per share (EPS) by about 6% in 2025, which translates to a $0.20 impact at the mid-point. Despite this, the company’s management remains optimistic that Nevro will contribute positively to earnings in the second year following the closure of the deal. Needham, Jefferies, BTIG, and Stifel have all provided their analysis of the acquisition, with Needham maintaining a Hold rating, Jefferies and BTIG maintaining a Buy rating, and Stifel also keeping a Buy rating on Globus Medical. These developments are part of a series of recent actions by Globus Medical to expand its portfolio in the medical device sector.
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