Unveiling the Investment Potential of Globus Medical Inc (GMED): A Comprehensive Analysis of ...
Globus Medical Inc (NYSE:GMED) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $51.55, Globus Medical Inc has witnessed a daily gain of 3.95%, marked against a three-month change of -11.63%. A thorough analysis, underlined by the GF Score, suggests that Globus Medical Inc is well-positioned for substantial growth in the near future.
Decoding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
Here is how Globus Medical Inc ranks in each of these components:
Financial strength rank: 10/10
Profitability rank: 10/10
Growth rank: 10/10
GF Value rank: 10/10
Momentum rank: 5/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With high ranks in financial strength, profitability, growth, and GF value, and a moderate momentum rank, GuruFocus assigned Globus Medical Inc the GF Score of 97 out of 100, which signals the highest outperformance potential.
Understanding Globus Medical Inc's Business
Globus Medical Inc is a medical device company that develops and provides healthcare products and solutions to hospitals, physicians, and surgical centers. The firm's products are organized into two categories: musculoskeletal solutions, which include medical devices and instruments used mostly for spinal and orthopedic procedures, and enabling technologies, which include advanced computer systems developed for enhancing surgical capabilities. The vast majority of the company's revenue is generated from musculoskeletal solutions products, and more than half of the revenue is earned in the United States.
This is the income breakdown of Globus Medical Inc:
Financial Strength Breakdown
According to the Financial Strength rating, Globus Medical Inc's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure.
Globus Medical Inc's Interest Coverage ratio is significantly high due to no long-term debt. Legendary investor Benjamin Graham said that he prefers companies that have an interest coverage ratio of at least 5.
With an Altman Z-Score of 20.62, Globus Medical Inc exhibits a strong defense against financial distress, highlighting its robust financial stability.
With a favorable Debt-to-Revenue ratio of 0, Globus Medical Inc's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows Globus Medical Inc's impressive standing among its peers in generating profit.
The Piotroski F-Score confirms Globus Medical Inc's solid financial situation based on Joseph Piotroski's nine-point scale, which measures a company's profitability, funding and operating efficiency.
Globus Medical Inc's strong Predictability Rank of 4.5 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, Globus Medical Inc demonstrates a strong commitment to expanding its business.
The company's 3-Year Revenue Growth Rate is 9%, which outperforms better than 54.53% of 728 companies in the Medical Devices & Instruments industry
Moreover, Globus Medical Inc has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 9.7, and the rate over the past five years is 5.9. This trend accentuates the company's continued capability to drive growth.
Conclusion
Given the company's strong financial strength, profitability, and growth metrics, the GF Score highlights Globus Medical Inc's unparalleled position for potential outperformance. This analysis underscores the importance of comprehensive financial evaluation in identifying investment opportunities with high growth potential.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
This article first appeared on GuruFocus.
