On Jun 8, we issued an updated research report on Globus Medical, Inc. GMED. We are worried about the challenging pricing scenario that continues to plague Globus Medical. Meanwhile, it is expanding its footprint in the overseas markets by consolidating direct and distributors’ sales force. The stock currently carries a Zacks Rank #5 (Strong Sell).
Over the past six months, shares of Globus Medical have underperformed the industry. The stock has lost 3% against 3.2% growth of the industry.
Globus Medical reported lower-than-expected first-quarter 2020 results. Within the U.S. Spine as well as International, the impact of COVID 19 was particularly significant in March with the sales impact being approximately $20 million for the entire quarter.
Globus Medical, Inc. Price
Globus Medical, Inc. price | Globus Medical, Inc. Quote
The company also noted that the U.S. spine business bottomed in the first full week of April, declining by about 70% from its pre-COVID 19 pace.
Margin contractions too are concerning. Stiff competition and foreign-exchange impacts are other worries. Low demand for healthcare products is also deterring.
The withdrawal of 2020 guidance over pandemic-led uncertainties is concerning.
Meanwhile, steady pace of product development buoys optimism. In the quarter, the company recorded robust demand for various products in the HEDRON line of 3D printed interbody spacers.
Strength in its U.S. Spine arm and potential in international business instill confidence. It also boasts a strong cash position.
Some better-ranked stocks from the broader medical space are Aphria Inc. APHA, Illumina, Inc. ILMN and QIAGEN N.V. QGEN.
Aphria’s long-term earnings growth rate is projected at 24.6%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Illumina’s long-term earnings growth rate is estimated at 11%. The company presently has a Zacks Rank #2.
QIAGEN’s long-term earnings growth rate is estimated at 12.2%. It currently sports a Zacks Rank #1.
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