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On Tuesday, JMP analysts maintained their Market Perform rating on Globus Medical (NYSE:GMED) shares. The firm’s stance comes after Globus Medical reported its first-quarter results for 2025. The company experienced unexpected shortfalls in revenue and earnings, primarily due to lower sales of Enabling Technology products and supply chain issues related to integrating legacy products from a recent merger. Despite these challenges, analysts noted that Globus Medical’s core business fundamentals remain robust. According to InvestingPro data, the company maintains a "GREAT" overall financial health score, with particularly strong metrics in cash flow management and growth potential.
Globus Medical’s first-quarter performance was notably affected by softer-than-anticipated Enabling Tech placements and supply chain disruptions. These disruptions were linked to the scaling of manufacturing processes for legacy products from NuVasive (NASDAQ:NUVA), Inc. However, these issues were resolved by the quarter’s end. Analysts emphasized that, despite the lower financial results, Globus Medical continues to witness strong demand for its Enabling Tech segment. The company’s revenue grew by 32% in the last twelve months, with a healthy gross profit margin of 67%.
In addition to addressing the quarterly performance, analysts highlighted several positive aspects of Globus Medical’s current financial health. The company achieved a record level of free cash flow for a first quarter and successfully repaid all outstanding debt associated with the NuVasive merger. As a result of these actions, Globus Medical emerged from the first quarter of 2025 with no debt on its balance sheet. Analysts expect the company to maintain a debt-free status in the near term, bolstered by sufficient cash flow to cover the cost of acquiring Nevro Corp (NYSE:NVRO). InvestingPro analysis shows the company’s strong liquidity position with a current ratio of 4.45, while maintaining minimal debt-to-equity levels.
The repayment of debt and strong free cash flow are significant milestones for Globus Medical, especially following the financial obligations from the NuVasive merger. The company’s ability to fully repay its debts and manage its cash flow effectively suggests a solid financial foundation, as indicated by the JMP analysts.
In conclusion, while Globus Medical faced some initial headwinds at the start of the year, the resolution of its supply chain issues and its strong cash flow position have kept analysts confident in the company’s market performance. The Market Perform rating reflects a cautious but stable outlook for the medical device company’s stock as it moves forward.
In other recent news, Globus Medical has launched a $500 million share repurchase program, which the company views as a strategic move to address a perceived undervaluation in the market. The repurchase will be funded through existing cash reserves, and the timing will depend on various factors, including market conditions. Meanwhile, Globus Medical’s first-quarter 2025 financial results fell short of expectations, with sales reported at $598.1 million, missing the anticipated range of approximately $626 million to $630.1 million. The shortfall was attributed to supply chain disruptions and challenges in the Musculoskeletal and Enabling Technology segments.
Following these results, several analyst firms have adjusted their price targets for the company. Oppenheimer reduced its target to $78, maintaining a Perform rating, while Truist Securities lowered its target to $68, keeping a Hold rating. BTIG revised its target to $77 but still supports a Buy rating, and Stifel adjusted its target to $70, also maintaining a Buy rating. Analysts have expressed concerns over the integration of Nevro Corp., which is expected to be more dilutive to earnings than initially forecasted. Despite the challenges, Globus Medical has maintained its full-year revenue guidance for 2025, although it has slightly decreased its earnings per share forecast.
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