Globus Medical stock target cut to $78 by Oppenheimer

On Friday, Oppenheimer analysts adjusted their outlook on Globus Medical (NYSE:GMED), reducing the price target from $90.00 to $78.00, while keeping a Perform rating on the stock. This adjustment follows the company’s first-quarter sales report for 2025, which fell short of both Oppenheimer and Wall Street’s expectations. According to InvestingPro data, the stock is currently trading near its 52-week low at $55.35, significantly below its 52-week high of $94.93, though the company maintains a "GREAT" financial health score of 3.3.

Globus Medical posted sales of $598.1 million, a slight decrease of 0.8% on a constant currency basis, missing the anticipated figures of approximately $630.1 million and $626 million. Despite the recent shortfall, the company maintains strong fundamentals with a healthy gross margin of 69.18% and impressive revenue growth of 32.26% over the last twelve months. The shortfall was attributed to a variety of factors, including the timing of international distributor orders and temporary supply chain disruptions that affected the manufacturing integration of legacy NuVasive (NASDAQ:NUVA) products.

The analyst noted that the Musculoskeletal segment was particularly weak, influenced by reimbursement challenges in neuro-monitoring and wound care. Additionally, the Enabling Technology sector underperformed due to extended timelines for closing deals.

Moreover, the recent acquisition of Nevro is expected to be more dilutive to earnings than initially forecasted, owing to the deal’s early completion. Despite the challenges faced in the first quarter, Globus Medical’s management expressed optimism for the second quarter. The company’s strong balance sheet, with a current ratio of 4.45 and minimal debt-to-equity of 0.02, positions it well to weather near-term challenges. However, analysts remain cautious due to the increasing competition in the robotic surgery space. For deeper insights into Globus Medical’s competitive position and detailed financial analysis, check out the comprehensive research report available on InvestingPro.

Oppenheimer’s commentary highlighted that management is now providing more deal options to customers, which has resulted in longer evaluation times. As the company looks forward to the second quarter, the competitive landscape, particularly in robotics, continues to be a point of emphasis for observers.

In other recent news, Globus Medical reported its financial results for the first quarter of 2025, missing both earnings and revenue forecasts. The company posted an earnings per share (EPS) of $0.68, below the expected $0.75, and revenue of $598.1 million, short of the anticipated $631.09 million. The revenue shortfall was attributed to supply chain disruptions, delayed neuromonitoring reimbursements, and extended sales cycles in the Enabling Technology segment. Despite these challenges, Globus Medical has reaffirmed its revenue forecast for the fiscal year 2025, maintaining a range between $2.8 billion and $2.9 billion, though it slightly decreased its adjusted EPS guidance.

Analysts have reacted to these developments with mixed adjustments. Truist Securities reduced its price target for Globus Medical shares from $80.00 to $68.00, maintaining a Hold rating due to concerns over distributor and supply chain issues. Meanwhile, BTIG adjusted its price target to $77.00 from $88.00 but maintained a Buy rating, citing potential for top-line growth despite the first quarter’s setbacks. Stifel also lowered its price target to $70 from $94 while maintaining a Buy rating, expressing cautious optimism as the company addresses integration-related challenges.

The acquisition of Nevro Corp (NYSE:NVRO) for $250 million was completed earlier than expected, contributing to the revised earnings guidance. Globus Medical remains focused on integrating Nevro and reducing operational expenses, while also launching two new products to strengthen its market position. The company has fully utilized its share repurchase authorization and aims to rebuild its cash reserves before considering further repurchases.

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