On Thursday, Truist Securities maintained its Hold rating on Globus Medical (NYSE:GMED) stock, with a steady price target of $90.00. The stance comes in response to the company's preliminary fourth-quarter revenue results and its initial guidance for the year 2025, which included a fourth-quarter sales figure that exceeded consensus estimates by 3.5%, reaching $657 million compared to the expected $635 million.
The company has shown impressive momentum, with InvestingPro data showing a remarkable 102.1% revenue growth over the last twelve months and an overall Financial Health score of "GREAT." Additionally, the midpoints for revenue and earnings per share (EPS) guidance for 2025 were set above consensus expectations.
Truist Securities expressed a cautiously optimistic view on Globus Medical (TASE:PMCN)'s stock performance, anticipating a positive reaction from the market to the recent financial updates. The stock has already demonstrated strong momentum, trading near its 52-week high of $87.22 and delivering an impressive 60.75% return over the past year. The firm's analysis suggests that the stock could potentially rise to meet their $90 price target, which would signify a premium valuation compared to Globus Medical's orthopedic peers.
The analysts at Truist Securities believe that the premium valuation for Globus Medical is justified and likely to be sustained, given the company's financial outlook. According to InvestingPro analysis, which offers 14 additional investment tips for subscribers, the stock currently trades at a high P/E ratio of 128.14, suggesting investors are pricing in significant growth expectations. Despite this, the firm has chosen to maintain a Hold rating, indicating that while they recognize the company's strengths, they await further evidence of significant out-year revenue and EPS growth before advocating for a higher stock upside relative to their established price target.
Globus Medical's stock movement in the near term is expected to reflect the market's reception of the company's fourth-quarter performance and forward-looking financial projections. The company's ability to outperform consensus estimates and provide guidance that surpasses market expectations has put it in a favorable position, with a strong current ratio of 2.51 indicating solid financial health.
Yet Truist Securities remains prudent in its rating until further growth indicators emerge. For deeper insights into Globus Medical's valuation and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 top US stocks.
In other recent news, Globus Medical, a medical device company, has seen an upgrade to Neutral from BofA Securities, following a successful integration of NuVasive (NASDAQ:NUVA). The company's fourth-quarter revenue announcement exceeded expectations by 3%, reaching $657 million. This comes after a year of integrating its salesforce, a period usually marked by operational inefficiencies.
Globus Medical's successful merger with NuVasive has led to a 6.6% rise in Q4 2024 sales and a 60.6% surge in full-year sales for 2024. The company has issued guidance for 2025, projecting revenues between $2.66 billion and $2.69 billion and earnings per share in the range of $3.40 to $3.50. These figures are approximately 1% higher than the midpoints of current Street estimates, indicating a potential acceleration in top-line growth.
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.
RBC Capital Markets has projected a positive outlook for the Medical Supplies & Devices sector for 2025, highlighting stocks like Boston Scientific (NYSE:BSX) and Intuitive Surgical (NASDAQ:ISRG). They believe that stocks like DexCom (NASDAQ:DXCM), Medtronic (NYSE:MDT), and Edwards Lifesciences (NYSE:EW) offer the best value or potential upside, particularly those that are dislocated or have recently reset. Their smid-cap selections feature Globus Medical, Penumbra (NYSE:PEN), and Insulet (NASDAQ:PODD) Corporation.
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