GMED

We rate GLOBUS MEDICAL INC (GMED) as a Hold with a composite score of 58.8/100 at a current price of $92.49. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in value (73th percentile) and stability (67th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (32th percentile) and momentum (59th percentile) tempers our overall conviction. We assign a Narrow Moat rating (52/100), Low uncertainty, and Standard capital allocation.

Key items to watch: sustainability of the current growth rate. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

GLOBUS MEDICAL INC holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 58.8/100 places it at rank #808 in our full 7,333-stock universe. At $7.7B in market capitalization, GLOBUS MEDICAL INC is a mid-cap player in the Manufacturing space, which limits certain scale advantages but may allow for more agile strategic execution.

Revenue is growing at 22%, though momentum at the 59th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 64% (+22.0pp vs sector) narrow to operating margins of 13% (+11.7pp vs sector) and net margins of 15.9%, yielding a gross-to-net conversion rate of 25%. This conversion rate is typical for the sector, suggesting a standard cost structure without notable efficiency advantages or disadvantages.

At a current price of $92.49, GLOBUS MEDICAL INC appears undervalued relative to its fundamentals. Our value factor score of 73/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The stock screens as attractively priced on a majority of these measures, suggesting the market may be underappreciating the underlying fundamentals.

The stock currently trades at a P/E of 27.0x (a 21% premium to the sector median of 22.3x), EV/EBITDA of 33.8x (at a premium), P/B of 2.8x, P/S of 4.4x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis partially supports given strong quality metrics.

We assign a Low uncertainty rating to GLOBUS MEDICAL INC. The company exhibits strong financial stability with a beta of 1.01, conservative leverage (16% D/E), and a stability factor in the 67th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.

We identify no major risk factors at this time. The company's stability factor sits at the 67th percentile with quality at the 65th percentile, both of which support our low-risk assessment. The absence of material leverage, profitability, or volatility concerns reduces the likelihood of a permanent capital loss scenario.

Key risk mitigants include: healthy gross margins of 64% provide a buffer against cost pressures; conservative leverage (16% D/E) limits balance sheet risk; above-average stability (67th percentile) suggests predictable business dynamics. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate GLOBUS MEDICAL INC's capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 10.2%, and the balance sheet is managed within acceptable parameters (D/E: 16%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; GLOBUS MEDICAL INC falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. Absent a dividend, the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, GLOBUS MEDICAL INC receives a Hold rating with a composite score of 58.8/100 (rank #808 of 7,333). Our quantitative framework assigns a Narrow Moat (52/100, trend: stable), Low uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 59/100.

Our analysis supports a neutral stance on GLOBUS MEDICAL INC. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.