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Globus Medical Rides on New Product Menu, U.S. Spine Business

Zacks Equity Research

On Dec 13, we issued an updated research report on Globus Medical, Inc. GMED. The company continues to witness higher demand for its Musculoskeletal Solutions products. Meanwhile, it is expanding its footprint in the overseas markets by consolidating direct and distributors’ sales force. The stock currently has a Zacks Rank #3 (Hold).

Over the past three months, shares of the company have outperformed its industry. The stock has rallied 32.4% compared with the industry’s 17.3% growth.

During the third quarter, Musculoskeletal Solutions continued to perform exceptionally well. Within this space, the U.S. Spine business consistently grabbed substantial market share, driven by competitive representative recruiting and an implant pull-through from ExcelsiusGPS installations.

Globus Medical, Inc. Price

Globus Medical, Inc. Price

Globus Medical, Inc. price | Globus Medical, Inc. Quote

The company expects to finish 2019 as the third consecutive year of competitive representative recruiting. Internationally, spine business grew 15% in the third quarter, ahead of the market across almost all significant geographies. Enabling Technologies also registered a strong uptrend on the increasing adoption of ExcelsiusGPS platform.

Globus Medical is currently on track to commercially market this product and launch its spine deformity solution in early fourth quarter. A raised sales outlook for 2019 is indicative of this bullish trend to sustain through the remaining year.

On the flip side, concerns about the pricing scenario persist as it will be affected by the cost-containment efforts of governmental healthcare, local hospitals and health systems. For the full year, pricing pressure is expected in the range of (2%)-0%.

Key Picks

Some better-ranked stocks from the broader medical space are Haemonetics Corporation HAE, National Vision Holdings, Inc EYE and ResMed Inc RMD.

Haemonetics currently has a Zacks Rank #2 (Buy) and a projected long-term earnings growth rate of 13.5%.

National Vision’s long-term earnings growth rate is estimated at 17.8%. The company currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

ResMed’s long-term earnings growth rate is estimated at 14%. It currently flaunts a Zacks Rank #1.

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