Affordable Growth. Analyze the stocks which are showing good growth, decent profitability and health and are not overvalued from a fundamental perspective.


GLOBUS MEDICAL INC - A

New York Stock Exchange, Inc. / Health Care / Health Care Equipment & Supplies

Fundamental Rating

6

Taking everything into account, GMED scores 6 out of 10 in our fundamental rating. GMED was compared to 195 industry peers in the Health Care Equipment & Supplies industry. GMED has only an average score on both its financial health and profitability. GMED is growing strongly while it is still valued neutral. This is a good combination! These ratings would make GMED suitable for growth investing!



6

1. Profitability

1.1 Basic Checks

GMED had positive earnings in the past year.
In the past year GMED had a positive cash flow from operations.
Each year in the past 5 years GMED has been profitable.
In the past 5 years GMED always reported a positive cash flow from operatings.

1.2 Ratios

Looking at the Return On Assets, with a value of 2.42%, GMED is in the better half of the industry, outperforming 74.87% of the companies in the same industry.
GMED's Return On Equity of 3.07% is fine compared to the rest of the industry. GMED outperforms 74.36% of its industry peers.
With a decent Return On Invested Capital value of 3.28%, GMED is doing good in the industry, outperforming 73.85% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for GMED is in line with the industry average of 8.50%.
Industry RankSector Rank
ROA 2.42%
ROE 3.07%
ROIC 3.28%
ROA(3y)6.4%
ROA(5y)7.08%
ROE(3y)7.31%
ROE(5y)7.96%
ROIC(3y)6.95%
ROIC(5y)7.2%

1.3 Margins

The Profit Margin of GMED (7.83%) is better than 81.54% of its industry peers.
In the last couple of years the Profit Margin of GMED has declined.
With an excellent Operating Margin value of 12.87%, GMED belongs to the best of the industry, outperforming 83.08% of the companies in the same industry.
GMED's Operating Margin has declined in the last couple of years.
The Gross Margin of GMED (65.05%) is better than 68.72% of its industry peers.
In the last couple of years the Gross Margin of GMED has declined.
Industry RankSector Rank
OM 12.87%
PM (TTM) 7.83%
GM 65.05%
OM growth 3Y-4.18%
OM growth 5Y-12.3%
PM growth 3Y-15.46%
PM growth 5Y-18.62%
GM growth 3Y-3.53%
GM growth 5Y-3.48%

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6

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so GMED is destroying value.
Compared to 1 year ago, GMED has more shares outstanding
GMED has more shares outstanding than it did 5 years ago.
GMED has a worse debt/assets ratio than last year.

2.2 Solvency

GMED has an Altman-Z score of 4.94. This indicates that GMED is financially healthy and has little risk of bankruptcy at the moment.
GMED has a better Altman-Z score (4.94) than 78.97% of its industry peers.
The Debt to FCF ratio of GMED is 2.53, which is a good value as it means it would take GMED, 2.53 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.53, GMED belongs to the top of the industry, outperforming 89.74% of the companies in the same industry.
A Debt/Equity ratio of 0.10 indicates that GMED is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.10, GMED is in line with its industry, outperforming 57.44% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0.1
Debt/FCF 2.53
Altman-Z 4.94
ROIC/WACC0.33
WACC9.95%

2.3 Liquidity

A Current Ratio of 4.88 indicates that GMED has no problem at all paying its short term obligations.
GMED has a Current ratio of 4.88. This is in the better half of the industry: GMED outperforms 69.23% of its industry peers.
GMED has a Quick Ratio of 2.72. This indicates that GMED is financially healthy and has no problem in meeting its short term obligations.
GMED's Quick ratio of 2.72 is in line compared to the rest of the industry. GMED outperforms 57.44% of its industry peers.
Industry RankSector Rank
Current Ratio 4.88
Quick Ratio 2.72

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7

3. Growth

3.1 Past

The Earnings Per Share has grown by an nice 12.56% over the past year.
The Earnings Per Share has been growing slightly by 6.89% on average over the past years.
Looking at the last year, GMED shows a very strong growth in Revenue. The Revenue has grown by 53.36%.
Measured over the past years, GMED shows a quite strong growth in Revenue. The Revenue has been growing by 17.08% on average per year.
EPS 1Y (TTM)12.56%
EPS 3Y17.67%
EPS 5Y6.89%
EPS growth Q2Q1.69%
Revenue 1Y (TTM)53.36%
Revenue growth 3Y25.74%
Revenue growth 5Y17.08%
Revenue growth Q2Q124.6%

3.2 Future

GMED is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 16.87% yearly.
The Revenue is expected to grow by 17.14% on average over the next years. This is quite good.
EPS Next Y17.81%
EPS Next 2Y19.96%
EPS Next 3Y19.9%
EPS Next 5Y16.87%
Revenue Next Year58.01%
Revenue Next 2Y30.37%
Revenue Next 3Y22.52%
Revenue Next 5Y17.14%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.

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6

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 22.07 indicates a rather expensive valuation of GMED.
84.10% of the companies in the same industry are more expensive than GMED, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 24.95, GMED is valued at the same level.
Based on the Price/Forward Earnings ratio of 18.73, the valuation of GMED can be described as rather expensive.
Based on the Price/Forward Earnings ratio, GMED is valued cheaper than 87.69% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.40. GMED is around the same levels.
Industry RankSector Rank
PE 22.07
Fwd PE 18.73

4.2 Price Multiples

80.51% of the companies in the same industry are more expensive than GMED, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of GMED indicates a rather cheap valuation: GMED is cheaper than 80.51% of the companies listed in the same industry.
Industry RankSector Rank
P/FCF 42.13
EV/EBITDA 19.58

4.3 Compensation for Growth

GMED's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of GMED may justify a higher PE ratio.
A more expensive valuation may be justified as GMED's earnings are expected to grow with 19.90% in the coming years.
PEG (NY)1.24
PEG (5Y)3.2
EPS Next 2Y19.96%
EPS Next 3Y19.9%

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0

5. Dividend

5.1 Amount

GMED does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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