Globus Medical Inc

GMED

Surgical & Medical Instruments & Apparatus

Mkt Cap

$5.825B

PE

47.40

Debt

$417.4M

Cash

$467.3M

EV

$5.775B

FCF

$165.2M

Market Cap

$5.825B

P/E Ratio

47.40

Debt

$417.4M

Cash

$467.3M

EV

$5.775B

FCF

$165.2M

Charts data: {"Earnings":[{"time":"2014-12-30","value":92485000},{"time":"2015-12-30","value":112784000},{"time":"2016-12-30","value":104341000},{"time":"2017-12-30","value":107348000},{"time":"2018-12-30","value":156474000},{"time":"2019-12-30","value":155210000},{"time":"2020-12-30","value":102285000},{"time":"2021-12-30","value":149191000},{"time":"2022-12-30","value":190169000},{"time":"2023-12-30","value":122873000}],"Sales":[{"time":"2014-12-30","value":474371000},{"time":"2015-12-30","value":544753000},{"time":"2016-12-30","value":563994000},{"time":"2017-12-30","value":635977000},{"time":"2018-12-30","value":712969000},{"time":"2019-12-30","value":785368000},{"time":"2020-12-30","value":789042000},{"time":"2021-12-30","value":958102000},{"time":"2022-12-30","value":1022843000},{"time":"2023-12-30","value":1568476000}],"Net Margins":[{"time":"2014-12-30","value":0.19496343579181696},{"time":"2015-12-30","value":0.20703695069141428},{"time":"2016-12-30","value":0.1850037411745515},{"time":"2017-12-30","value":0.1687922676448991},{"time":"2018-12-30","value":0.21946816762019106},{"time":"2019-12-30","value":0.1976270996526469},{"time":"2020-12-30","value":0.12963188271346773},{"time":"2021-12-30","value":0.15571515350140172},{"time":"2022-12-30","value":0.18592198411681948},{"time":"2023-12-30","value":0.07833910114021508}],"Assets":[{"time":"2014-12-30","value":703547000},{"time":"2015-12-30","value":834100000},{"time":"2016-12-30","value":927637000},{"time":"2017-12-30","value":1078502000},{"time":"2018-12-30","value":1300670000},{"time":"2019-12-30","value":1532077000},{"time":"2020-12-30","value":1679485000},{"time":"2021-12-30","value":1957263000},{"time":"2022-12-30","value":2076126000},{"time":"2023-12-30","value":5086083000}],"Stockholders Equity":[{"time":"2014-12-30","value":585454000},{"time":"2015-12-30","value":715324000},{"time":"2016-12-30","value":832078000},{"time":"2017-12-30","value":967778000},{"time":"2018-12-30","value":1185516000},{"time":"2019-12-30","value":1402452000},{"time":"2020-12-30","value":1506297000},{"time":"2021-12-30","value":1741388000},{"time":"2022-12-30","value":1846373000},{"time":"2023-12-30","value":3997959000}],"ROE":[{"time":"2014-12-30","value":0.15797142047026752},{"time":"2015-12-30","value":0.15766841319458036},{"time":"2016-12-30","value":0.12539809969738414},{"time":"2017-12-30","value":0.11092213296851137},{"time":"2018-12-30","value":0.13198809632261396},{"time":"2019-12-30","value":0.11067045431857918},{"time":"2020-12-30","value":0.06790493508252357},{"time":"2021-12-30","value":0.08567361208415356},{"time":"2022-12-30","value":0.10299598185198765},{"time":"2023-12-30","value":0.030733931988797283}],"ROA":[{"time":"2014-12-30","value":0.1966634780618779},{"time":"2015-12-30","value":0.20647644167366022},{"time":"2016-12-30","value":0.1661652133323703},{"time":"2017-12-30","value":0.1500599906166145},{"time":"2018-12-30","value":0.13018290573319904},{"time":"2019-12-30","value":0.1239794083456641},{"time":"2020-12-30","value":0.07496286063882679},{"time":"2021-12-30","value":0.09217310090672536},{"time":"2022-12-30","value":0.11705407089935775},{"time":"2023-12-30","value":0.03251873789712044}]}

Globus Medical, Inc., a medical device company, develops and commercializes healthcare solutions for patients with musculoskeletal disorders in the United States and internationally. It offers spine products, such as traditional fusion implants comprising pedicle screw and rod systems, plating systems, intervertebral spacers, and corpectomy devices for treating degenerative and congenital conditions, deformity, tumors, and trauma injuries; treatment options for motion preservation technologies that consist of dynamic stabilization, total disc replacement, and interspinous distraction devices; interventional pain management solutions to treat vertebral compression fractures; and regenerative biologic products comprising of allografts and synthetic alternatives. The company also offers products for the treatment of orthopedic trauma, including fracture plates, compression screws, intramedullary nails, and external fixation systems; and hip and knee joint solutions, including modular hip stems and acetabular cups, as well as posterior stabilizing and cruciate retaining knee arthroplasty implants. In addition, it distributes human cell, tissue, and cellular and tissue-based products. The company sells its products through direct or distributor sales presence, as well as its hip and knee products primarily through independent sales agents. Globus Medical, Inc. was incorporated in 2003 and is headquartered in Audubon, Pennsylvania.

Sector

10-Q
9/30/23
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10-K
12/31/22
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12/31/19
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10-K
12/31/18
10-Q
9/30/18
10-Q
6/30/18
10-Q
3/31/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Globus Medical Inc

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$165.2M	$180.2M	$195.8M	$211.8M	$228.1M	$244.7M	$261.4M	$278M	$294.4M	$310.5M	$326M	$3.26B
DCF		$156.7M	$148M	$139.2M	$130.4M	$121.7M	$113M	$104.5M	$96.25M	$88.26M	$80.58M	$805.8M
Value	$1.985B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 5.8%

Earnings Stability 41%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been decreasing indicating a lower marginal ROA with respect to the calculated one, this could impede growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	21%	19%	17%	22%	20%	13%	16%	19%	7.8%	7.8%
ROA	21%	17%	15%	13%	12%	7.5%	9.2%	12%	3.3%	3.3%
ROE	16%	13%	11%	13%	11%	6.8%	8.6%	10%	3.1%	3.1%

What is the average Net Margin?

The average Net Margin over the past 5 years is +16.11%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is -2.04%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +9.51%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is -1.41%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +8.83%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is -1.46%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Under the assumption that FCF does not diminish and debt does not increase, the current years to repay the debt are acceptable.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	-	-	-	-	-	-	-	-	2.53	2.53
Debt Equity	-	-	-	-	-	-	-	-	0.10	0.10
MIN
Graham Stability	-	-	100%	100%	100%	73%	100%	100%	83%	73%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 2.53.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.73.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has not been increasing in the past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	16%	17%	26%	53%	2.8%
Net Income	2.4%	-4.7%	6.3%	-35%	-2%
Stockholders Equity	25%	28%	38%	120%	5.5%
FCF	3.4%	6.3%	6.9%	58%	-2%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +17.08%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +2.82%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is -4.72%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -1.97%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +27.52%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +5.5%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +6.26%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is -1.99%.