Over the past six months, Globus Medical’s shares (currently trading at $79.99) have posted a disappointing 10.1% loss, well below the S&P 500’s 10.7% gain. This might have investors contemplating their next move.
Following the drawdown, is now a good time to buy GMED? Find out in our full research report, it’s free.
Why Does Globus Medical Spark Debate?
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.
Two Things to Like:
1. Constant Currency Revenue Propels Growth
In addition to reported revenue, constant currency revenue is a useful data point for analyzing Medical Devices & Supplies - Specialty companies. 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 22.8% year-on-year growth. This performance was fantastic and shows it can expand quickly on a global scale regardless of the macroeconomic environment. 
2. Outstanding Long-Term EPS Growth
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 an astounding 22.2% compounded annual growth rate over the last five years. This performance was better than most healthcare businesses.
One Reason to Be Careful:
New Investments Fail to Bear Fruit as ROIC Declines
A company’s ROIC, or return on invested capital, shows how much operating profit it makes compared to the money it has raised (debt and equity).
Unfortunately, Globus Medical’s ROIC has decreased over the last few years. If its returns keep falling, it could suggest its profitable growth opportunities are drying up. We’ll keep a close eye.
Final Judgment
Globus Medical’s merits more than compensate for its flaws. After the recent drawdown, the stock trades at 16.6× forward P/E (or $79.99 per share). Is now a good time to buy? See for yourself in our full research report, it’s free.
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