Thursday, January 11, 2018

Globus Medical Revving Up Into 2018

I’ve thought highly of Globus Medical (GMED), but I really didn’t expect the strength in the stock that the market has delivered since my last write-up. The shares have risen more than a third in a little more than six months and close to 80% in the past year, with the stock really taking flight after third quarter earnings. I believe at least some of this is due to Globus Medical offering pretty clean growth in a spine market where growth has become harder to find recently, not to mention the upside from the company’s entry into trauma.

It’s not all that comfortable to be on the negative side of a story with momentum, but I struggle to make the numbers work with Globus now. I do believe the company’s new robot platform, trauma products, and strong overall portfolio in spine can drive high single-digit revenue growth and double-digit FCF growth, but that’s already in the share price and I’m not comfortable paying more than 5.5x forward revenue. That being the case, I’ll be cheering from the sidelines for the time being.

Follow this link for more:
Globus Medical Revving Up Into 2018

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