Globus Medical: Retain Buy With EPS Upside, Seeking Objectives Of $86, $106

Nov. 18, 2022 5:46 AM ETGlobus Medical, Inc. (GMED)
Zach Bristow profile picture
Zach Bristow
2.51K Followers

Summary

  • Globus Medical is positioned to deliver tremendous EPS upside over the coming 3 quarters in our estimation.
  • We are sizing up our long-term position with a buy at $73, confident GMED will hit this point in the coming weeks.
  • We see GMED fairly priced at 45x forward earnings, driven by growth in robotics, international sales.
  • Rate buy, first price objective $86, second objective $106.

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Investment Thesis

From the Portfolio Manager's desk

Here at HB Insights we continue adding to our basket of med-tech stocks, filled with wonderful, selective opportunities with asymmetrical risk/reward. Globus Medical, Inc. (NYSE:NYSE:GMED) is a position

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Note: Log scale shown (Data: Updata)

44

Data: GMED Q3 FY22 10-Q, pp. 24

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Data: HB Insights Estimates

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Data: Refinitiv Eikon

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Note: Log scale shown (Data: Updata)

44

Note: Fair forward price-earnings multiple calculated as 1/fair cost of equity. This is known as the 'steady state' P/E. For more and literature see: [M. Mauboussin, D. Callahan, (2014): What Does a Price-Earnings Multiple Mean?; An Analytical Bridge between P/Es and Solid Economics, Credit Suisse Global Financial Strategies, January 29 2014]. (Data: HB Insights Estimates)

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Note: As above (Data: HB Insights estimates)

44

Data: Updata

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Data: Updata

This article was written by

Zach Bristow profile picture
2.51K Followers
Buy side equity strategist conducting a blend of fundamental, technical, long-term analysis across the broad healthcare spectrum in developed markets. Helping you position your portfolios for the future is my top priority. Shoot me a message to discuss trade ides or talk portfolio construction. Disclaimer:The opinions expressed in all articles do not constitute as investment advice. Please remember to conduct your own due diligence.

Disclosure: I/we have a beneficial long position in the shares of GMED either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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