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Why Is Globus Medical (GMED) Down 0.2% Since Last Earnings Report?
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A month has gone by since the last earnings report for Globus Medical (GMED - Free Report) . Shares have lost about 0.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Globus Medical due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Globus Medical Q2 Earnings Surpass, Raises View
Globus Medicalreported second-quarter 2024 adjusted earnings per share of 75 cents, which beat the Zacks Consensus Estimate by 10.3%. The figure increased 19% year over year.
The adjusted earnings per share excludes certain non-recurring expenses and benefits, such as the amortization of intangibles, merger and acquisition-related costs/licensing and provision for litigation, among others.
Without adjustments, the company registered a GAAP diluted EPS of 23 cents, down 59.6% from the year-ago quarter’s figure.
Revenues
Worldwide sales increased a staggering 115.9% year over year to $629.7 million. The reported figure exceeded the Zacks Consensus Estimate by 2.4%.
Net sales improvement was driven by the addition of NuVasive, as well as increased volumes of spine product sales and Enabling Technology products and services.
Geographic Details
Net sales generated in the United States increased 103.5% year over year (same at CER) to $499.5 million. Our model projected a 103.8% improvement in sales from this region.
Across international markets, revenues surged 182.3% (up 191.3%% at CER) to $130.2 million, which surpassed our model estimate of $112 million.
Product Category
Musculoskeletal Solutions generated revenues of $592.9 million, up 130.8% year over year, mainly driven by contributions from the NuVasive merger. Our model projected a year-over-year top-line improvement of 124.5% from this segment.
Enabling Technologies generated revenues of $36.8 million in the second quarter, up 5.7% from the prior-year reported figure. The growth was driven by increased sales of Excelsius GPS and the EGPS robotic system. The reported figure also surpassed our model estimate of $35.7 million.
Margins
The gross profit in the reported quarter rose 71.8% year over year to $369.7 million. However, the gross margin contracted 1507 basis points (bps) to 58.7% on a 240% surge in the cost of sales.
SG&A expenses in the reported quarter totaled $238.1 million, up 98.3% from the year-ago quarter’s level. Research and development expenses increased 76.6% to $37.7 million.
Adjusted operating profit rose 27.3% from the year-ago quarter’s figure to $93.8 million. Despite that, the adjusted operating margin contracted 1038 bps in the quarter to 14.9% due to increased operating expenses.
Cash Position
Globus Medical exited the second quarter of 2024 with combined cash and cash equivalents and short-term marketable securities of $410.4 million compared with $434.5 million at the end of the first quarter of 2024.
Cumulative net cash provided by operating activities at the end of the second quarter was $106.6 million compared with the year-ago figure of $88.3 million.
2024 Guidance
GMED updated its 2024 guidance.
The full-year net sales are projected to be in the band of $2.47-$2.49 billion (compared with the earlier projected range of $2.460-$2.485 billion). The Zacks Consensus Estimate is currently pegged at $2.48 billion.
The company’s adjusted earnings per share for 2024 is now expected to be in the range of $2.80-$2.90 (up from the previously guided range of $2.75-$2.85). The Zacks Consensus Estimate is pegged at $2.82.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, Globus Medical has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Globus Medical has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Globus Medical belongs to the Zacks Medical - Instruments industry. Another stock from the same industry, Edwards Lifesciences (EW - Free Report) , has gained 12.9% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
Edwards Lifesciences reported revenues of $1.39 billion in the last reported quarter, representing a year-over-year change of -9.4%. EPS of $0.70 for the same period compares with $0.66 a year ago.
For the current quarter, Edwards Lifesciences is expected to post earnings of $0.68 per share, indicating a change of +15.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.2% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Edwards Lifesciences. Also, the stock has a VGM Score of F.
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Why Is Globus Medical (GMED) Down 0.2% Since Last Earnings Report?
A month has gone by since the last earnings report for Globus Medical (GMED - Free Report) . Shares have lost about 0.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Globus Medical due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Globus Medical Q2 Earnings Surpass, Raises View
Globus Medicalreported second-quarter 2024 adjusted earnings per share of 75 cents, which beat the Zacks Consensus Estimate by 10.3%. The figure increased 19% year over year.
The adjusted earnings per share excludes certain non-recurring expenses and benefits, such as the amortization of intangibles, merger and acquisition-related costs/licensing and provision for litigation, among others.
Without adjustments, the company registered a GAAP diluted EPS of 23 cents, down 59.6% from the year-ago quarter’s figure.
Revenues
Worldwide sales increased a staggering 115.9% year over year to $629.7 million. The reported figure exceeded the Zacks Consensus Estimate by 2.4%.
Net sales improvement was driven by the addition of NuVasive, as well as increased volumes of spine product sales and Enabling Technology products and services.
Geographic Details
Net sales generated in the United States increased 103.5% year over year (same at CER) to $499.5 million. Our model projected a 103.8% improvement in sales from this region.
Across international markets, revenues surged 182.3% (up 191.3%% at CER) to $130.2 million, which surpassed our model estimate of $112 million.
Product Category
Musculoskeletal Solutions generated revenues of $592.9 million, up 130.8% year over year, mainly driven by contributions from the NuVasive merger. Our model projected a year-over-year top-line improvement of 124.5% from this segment.
Enabling Technologies generated revenues of $36.8 million in the second quarter, up 5.7% from the prior-year reported figure. The growth was driven by increased sales of Excelsius GPS and the EGPS robotic system. The reported figure also surpassed our model estimate of $35.7 million.
Margins
The gross profit in the reported quarter rose 71.8% year over year to $369.7 million. However, the gross margin contracted 1507 basis points (bps) to 58.7% on a 240% surge in the cost of sales.
SG&A expenses in the reported quarter totaled $238.1 million, up 98.3% from the year-ago quarter’s level. Research and development expenses increased 76.6% to $37.7 million.
Adjusted operating profit rose 27.3% from the year-ago quarter’s figure to $93.8 million. Despite that, the adjusted operating margin contracted 1038 bps in the quarter to 14.9% due to increased operating expenses.
Cash Position
Globus Medical exited the second quarter of 2024 with combined cash and cash equivalents and short-term marketable securities of $410.4 million compared with $434.5 million at the end of the first quarter of 2024.
Cumulative net cash provided by operating activities at the end of the second quarter was $106.6 million compared with the year-ago figure of $88.3 million.
2024 Guidance
GMED updated its 2024 guidance.
The full-year net sales are projected to be in the band of $2.47-$2.49 billion (compared with the earlier projected range of $2.460-$2.485 billion). The Zacks Consensus Estimate is currently pegged at $2.48 billion.
The company’s adjusted earnings per share for 2024 is now expected to be in the range of $2.80-$2.90 (up from the previously guided range of $2.75-$2.85). The Zacks Consensus Estimate is pegged at $2.82.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, Globus Medical has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Globus Medical has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Globus Medical belongs to the Zacks Medical - Instruments industry. Another stock from the same industry, Edwards Lifesciences (EW - Free Report) , has gained 12.9% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
Edwards Lifesciences reported revenues of $1.39 billion in the last reported quarter, representing a year-over-year change of -9.4%. EPS of $0.70 for the same period compares with $0.66 a year ago.
For the current quarter, Edwards Lifesciences is expected to post earnings of $0.68 per share, indicating a change of +15.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.2% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Edwards Lifesciences. Also, the stock has a VGM Score of F.