On Thursday, BofA Securities analyst Craig Bijou upgraded shares of Globus Medical (NYSE:GMED), a medical device company, from Underperform to Neutral and increased the price target to $97 from $80.
The upgrade comes after Globus Medical (TASE:PMCN)'s successful integration of NuVasive (NASDAQ:NUVA), which has been managed more effectively than initially anticipated, reducing the risk of operational inefficiencies moving forward. The market has responded positively to this integration, with InvestingPro data showing a remarkable 60.75% return over the past year and the stock currently trading near its 52-week high of $87.22.
Globus Medical's fourth-quarter revenue announcement, which came in at $657 million, exceeded Wall Street's expectations by 3%. This performance is particularly noteworthy as it represents a full year since the company began integrating its salesforce—a period in which dis-synergies often become apparent based on historical data from similar mergers in the orthopedics and spine sector.
BofA Securities believes that any potential disruptions for 2025 are likely reflected in the company's current guidance. According to InvestingPro analysis, the company maintains a strong financial health score of 3.24 (rated as "GREAT"), with impressive revenue growth of 102.1% over the last twelve months.
Furthermore, Globus Medical has issued guidance for 2025, projecting revenues between $2.66 billion and $2.69 billion and earnings per share (EPS) in the range of $3.40 to $3.50. These figures are approximately 1% higher than the midpoints of current Street estimates. The guidance suggests an acceleration in top-line growth, which BofA interprets as a sign of the management's confidence in meeting high cross-selling expectations.
The analyst's comments underscore the company's ability to navigate the integration phase post-acquisition, which is a critical time for demonstrating operational stability and growth potential. By surpassing revenue estimates and providing optimistic future guidance, Globus Medical has demonstrated a strong performance trajectory that has led to a more favorable outlook from BofA Securities.
In other recent news, Globus Medical has reported a significant increase in sales for Q4 2024 and a promising outlook for 2025. The company's sales saw a 6.6% rise for Q4 2024 compared to the same period in 2023, reaching approximately $657.0 million. Full-year sales for 2024 also witnessed a substantial surge of 60.6% to approximately $2.52 billion. These developments follow the company's merger with NuVasive, which has strengthened its product offerings in the spine industry.
Globus Medical's revenue guidance for the full year 2025 is estimated to be between $2.66 billion and $2.69 billion. The company also expects a fully diluted non-GAAP earnings per share in the range of $3.40 to $3.50. These figures are based on management's initial analysis and may be subject to final adjustments.
Analysts from Roth/MKM and BTIG have maintained a Buy rating on Globus Medical's stock, citing potential growth from merger-related synergies and the expansion of robotics. Morgan Stanley (NYSE:MS) also sees growth opportunities for Globus Medical in the expansion of robotics, specifically the upcoming ExcelsiusFlex stock. Each 1% share gain in the procedure market could translate to over $11 million in revenue, according to the firm's estimates.
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