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Yahoo
a day ago
- Business
- Yahoo
GMED Q1 Earnings Call: Integration Challenges, New Acquisition, and Market Uncertainties Shape Outlook
Medical device company Globus Medical (NYSE:GMED) fell short of the market's revenue expectations in Q1 CY2025, with sales falling 1.4% year on year to $598.1 million. On the other hand, the company's full-year revenue guidance of $2.85 billion at the midpoint came in 4.2% above analysts' estimates. Its non-GAAP profit of $0.68 per share was 8.6% below analysts' consensus estimates. Is now the time to buy GMED? Find out in our full research report (it's free). Revenue: $598.1 million vs analyst estimates of $627.6 million (1.4% year-on-year decline, 4.7% miss) Adjusted EPS: $0.68 vs analyst expectations of $0.74 (8.6% miss) Adjusted EBITDA: $177.8 million vs analyst estimates of $195.4 million (29.7% margin, 9% miss) The company lifted its revenue guidance for the full year to $2.85 billion at the midpoint from $2.68 billion, a 6.5% increase Management lowered its full-year Adjusted EPS guidance to $3.15 at the midpoint, a 8.7% decrease Operating Margin: 16.2%, up from 1.3% in the same quarter last year Market Capitalization: $8.17 billion Globus Medical's first quarter results highlighted several operational challenges, with CEO Dan Scavilla attributing flat sales to 'softer enabling tech sales against difficult comp, temporary integration related supply chain disruption and timing of international distributor orders.' The U.S. Spine segment posted modest growth, supported by high retention among sales teams and increased cross-selling, but this was offset by supply chain issues and reduced third-party biologics sales tied to changes in reimbursement for wound care. Management acknowledged the impact of these headwinds, emphasizing that issues such as back orders and delayed distributor activity have already begun to improve in the second quarter. Despite these setbacks, new product launches like the Cohere ALIF spacer and Reline eGPS fixation system were introduced, aiming to strengthen the company's portfolio and drive future growth. Looking ahead, management's updated full-year guidance reflects optimism about resolving operational disruptions and integrating recent acquisitions. Scavilla highlighted, 'We're already seeing stronger results in Q2 throughout the business as we remediate supply chain disruptions, fill open distributor orders and close robot deals.' The Nevro acquisition, completed in April, is expected to expand Globus Medical's reach in the musculoskeletal market, with management focused on driving profitable growth through operational efficiencies and leveraging the combined sales force. CFO Keith Pfeil cautioned that near-term profitability will be influenced by integration costs, stating, 'The key focus is going to be figuring out their operational expenses and working to reduce those.' Management remains focused on achieving synergy savings and restoring momentum across core business areas. Management identified temporary supply chain disruptions, delayed enabling technology sales, and integration complexities as the primary drivers of first quarter performance. The leadership team also pointed to positive early signs in Q2 business activity and the strategic potential of the Nevro acquisition. Supply chain disruptions impact: Temporary manufacturing integration issues and back orders, especially from legacy NuVasive products, constrained product availability across spine and trauma segments. Management stated these disruptions were largely resolved late in the quarter, with production resuming to normal rates. Enabling technology sales decline: Enabling technology, including robotic systems, saw a notable year-over-year decline due to elongated selling cycles and delayed deal closures amid market uncertainty. Management stressed that the underlying demand remains robust, with the pipeline described as 'robust' and several deals closing early in Q2. U.S. Spine steady, biologics pressured: While U.S. Spine posted modest growth driven by product strength and salesforce retention, the biologics business faced headwinds from anticipated changes in reimbursement for wound care products. This led to a planned reduction in third-party biologics sales. Integration of NuVasive and Nevro: Leadership emphasized ongoing efforts to realize cost synergies from the NuVasive merger and the recently closed Nevro acquisition. Expense reduction, especially in SG&A (selling, general, and administrative expenses), is a priority for improving profitability and offsetting dilution from these deals. New product launches and innovation: Two new products—the Cohere ALIF spacer and Reline eGPS fixation system—were launched, aiming to expand market penetration and address unmet clinical needs. Management cited these as evidence of a strong R&D pipeline. Globus Medical's outlook is shaped by the pace of supply chain recovery, integration of acquisitions, and shifts in reimbursement for certain product lines. Nevro integration and cost control: Management expects the Nevro acquisition to expand addressable markets and drive long-term growth, but near-term profitability will depend on reducing operational expenses and integrating the business efficiently. The company aims to streamline SG&A to align costs with expected revenue. Reimbursement landscape changes: Reductions in reimbursement for wound care and neuromonitoring have impacted revenue streams. Management is pivoting the biologics strategy toward more stable, direct business opportunities to mitigate volatility from external reimbursement shifts. Enabling technology sales cycles: While enabling technology sales were delayed in Q1 due to elongated customer purchasing decisions, management expects a recovery in subsequent quarters as backlogs clear and hospital decision-making stabilizes. Risks remain if broader market uncertainty persists or if competitive dynamics intensify. In the coming quarters, the StockStory team will be monitoring (1) the pace at which supply chain issues and distributor back orders are resolved, (2) progress in integrating the Nevro business and realizing cost synergies, and (3) the recovery of enabling technology sales as hospital purchasing cycles normalize. Additionally, we'll track any further changes in reimbursement policies affecting core business lines. Globus Medical currently trades at a forward P/E ratio of 17.1×. At this valuation, is it a buy or sell post earnings? Find out in our full research report (it's free). The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
27-05-2025
- Business
- Yahoo
BTIG Downgrades Globus Medical (GMED) to Neutral on Spine Business Concerns
On Tuesday, May 27, an analyst from BTIG downgraded Globus Medical Inc. (NYSE:GMED) from Buy to Neutral, citing concerns about its Spine business. The analyst did not assign a price target following the downgrade. Globus Medical is a medical device company specializing in healthcare solutions primarily for musculoskeletal disorders. In early May, the company reported weaker-than-expected Q1 2025 results, and the analyst believes this could signal further challenges across its business lines, particularly in the Spine division, which has now completed one year since the acquisition of NuVasive Inc. A doctor in a medical facility demonstrating a procedure with a state-of-the-art medical device. The downgrade also reflects negative cross-reads from industry peer Medtronic plc (NYSE:MDT), whose Q4 results beat expectations for both organic revenue growth and its 2026 outlook. The analyst suggests that this outperformance may indicate that Medtronic is gaining market share at the expense of competitors, such as Globus. As a result, the analyst expects Globus Medical to factor in these headwinds and update its FY 2025 guidance. Until the company addresses these challenges, the analyst anticipates the stock will underperform relative to previous expectations. While we acknowledge the potential of GMED as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than GMED and that has 100x upside potential, check out our report about the cheapest AI stock. READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money. Disclosure: None.
Yahoo
25-04-2025
- Business
- Yahoo
Globus Medical (GMED): Buy, Sell, or Hold Post Q4 Earnings?
Globus Medical currently trades at $75.69 per share and has shown little upside over the past six months, posting a middling return of 3.4%. However, the stock is beating the S&P 500's 5.2% decline during that period. Is GMED a buy right now? Or is this an overvalued company? Find out in our full research report, it's free. With operations spanning 64 countries and a portfolio of over 10 new products launched in 2023 alone, Globus Medical (NYSE:GMED) develops and sells implantable devices, surgical instruments, and technology solutions for spine, orthopedic, and neurosurgical procedures. Investors interested in Medical Devices & Supplies - Specialty companies should track constant currency revenue in addition to reported revenue. This metric excludes currency movements, which are outside of Globus Medical's control and are not indicative of underlying demand. Over the last two years, Globus Medical's constant currency revenue averaged 64.2% year-on-year growth. This performance was fantastic and shows it can expand quickly on a global scale regardless of the macroeconomic environment. Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions. Globus Medical's EPS grew at a spectacular 12.5% compounded annual growth rate over the last five years. This performance was better than most healthcare businesses. ROIC, or return on invested capital, is a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity). We like to invest in businesses with high returns, but the trend in a company's ROIC is what often surprises the market and moves the stock price. Over the last few years, Globus Medical's ROIC has unfortunately decreased. If its returns keep falling, it could suggest its profitable growth opportunities are drying up. We'll keep a close eye. Globus Medical has huge potential even though it has some open questions, and after its recent outperformance in a weaker market environment, the stock trades at 21.5× forward price-to-earnings (or $75.69 per share). Is now a good time to initiate a position? See for yourself in our full research report, it's free. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free. Sign in to access your portfolio
