Stifel maintains GMED buy rating, $92 target amid NVRO buyout

On Thursday, Stifel analysts maintained a Buy rating and a $92.00 price target for Globus Medical (NYSE:GMED) stock following the company’s announcement of acquiring Nevro Corp . (NYSE:NVRO) for an equity value of approximately $250 million. According to InvestingPro data, Globus Medical maintains excellent financial health with an overall score of "GREAT" and strong liquidity metrics. The transaction has led Globus Medical to revise its 2025 earnings per share (EPS) guidance, with the EPS midpoint now approximately $0.20 lower, a decrease of about 6%.

Globus Medical’s unexpected move to acquire NVRO was characterized by Stifel as a surprising decision in terms of timing, market, and asset selection. The company’s stock has shown remarkable strength, trading near its 52-week high of $94.93, with a substantial 75% return over the past year. The analysts indicated that the acquisition introduces new risks just as the company was moving past previous challenges associated with NuVasive , Inc. (NASDAQ:NUVA).

Despite the initial complexity the acquisition adds to Globus Medical’s narrative, Stifel sees potential benefits in the deal. The acquisition is described as modest-sized, at 0.5 times sales, and could offer diversification, cross-selling, and profit and loss (P&L) leverage opportunities. These factors might support Globus Medical’s continued strong revenue growth and margin profile.

Stifel anticipates that additional details regarding the impact of the acquisition will be forthcoming over the next few weeks. The firm also expects further insights to be shared during an upcoming analyst day, which has yet to be scheduled.

The acquisition of NVRO by Globus Medical represents a strategic move that could reshape the company’s growth trajectory and market position. As the industry watches closely, Stifel’s current assessment reflects both caution due to the added complexity and optimism about the potential for sustained growth and profitability.

In other recent news, Globus Medical, a renowned musculoskeletal solutions company, has announced an agreement to acquire Nevro Corp., a global medical device firm specializing in chronic pain treatment, for approximately $250 million. The transaction, approved unanimously by both companies’ boards, is expected to conclude late in the second quarter of 2025. This acquisition follows a year of significant growth for Globus Medical, with a reported 60.6% increase in sales, from the previous year, to $2.52 billion.

Furthermore, Canaccord Genuity maintained its Buy rating on Globus Medical’s stock, following the company’s announcement of strong preliminary results for the fourth quarter of 2024. Truist Securities also maintained its Hold rating, while BofA Securities upgraded the shares from Underperform to Neutral, citing successful integration of NuVasive and better-than-expected revenue.

In addition, Globus Medical has issued a positive revenue guidance for 2025, projecting revenues between $2.66 billion and $2.69 billion. This outlook suggests an acceleration in top-line growth, interpreted by BofA as a sign of the management’s confidence in meeting high cross-selling expectations. These are recent developments for Globus Medical, which is advised by Morgan Stanley (NYSE:MS) & Co. LLC and Wyrick Robbins Yates & Ponton LLP, with Nevro advised by BofA Securities, Inc. and Latham & Watkins LLP.

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