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"We rate GLOBUS MEDICAL INC (GMED) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income increased by 178.0% when compared to the same quarter one year prior, rising from $7.43 million to $20.65 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 7.7%. Since the same quarter one year prior, revenues slightly increased by 6.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- GLOBUS MEDICAL INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GLOBUS MEDICAL INC reported lower earnings of $0.73 versus $0.80 in the prior year. This year, the market expects an improvement in earnings ($0.92 versus $0.73).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market on the basis of return on equity, GLOBUS MEDICAL INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- The gross profit margin for GLOBUS MEDICAL INC is currently very high, coming in at 81.34%. Regardless of GMED's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GMED's net profit margin of 18.17% compares favorably to the industry average.
- You can view the full analysis from the report here: GMED Ratings Report
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