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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

7

GMED gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 202 industry peers in the Health Care Equipment & Supplies industry. GMED has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. GMED is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one! With these ratings, GMED could be worth investigating further for growth and quality investing!.



8

1. Profitability

1.1 Basic Checks

In the past year GMED was profitable.
In the past year GMED had a positive cash flow from operations.
GMED had positive earnings in each of the past 5 years.
GMED had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

With a decent Return On Assets value of 2.95%, GMED is doing good in the industry, outperforming 78.22% of the companies in the same industry.
GMED's Return On Equity of 3.77% is fine compared to the rest of the industry. GMED outperforms 75.74% of its industry peers.
With a decent Return On Invested Capital value of 3.88%, GMED is doing good in the industry, outperforming 77.23% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for GMED is in line with the industry average of 8.48%.
The last Return On Invested Capital (3.88%) for GMED is well below the 3 year average (8.17%), which needs to be investigated, but indicates that GMED had better years and this may not be a problem.
Industry RankSector Rank
ROA 2.95%
ROE 3.77%
ROIC 3.88%
ROA(3y)7.63%
ROA(5y)9.01%
ROE(3y)8.55%
ROE(5y)9.99%
ROIC(3y)8.17%
ROIC(5y)9.27%

1.3 Margins

GMED has a better Profit Margin (12.88%) than 91.58% of its industry peers.
GMED's Profit Margin has improved in the last couple of years.
GMED's Operating Margin of 19.38% is amongst the best of the industry. GMED outperforms 93.07% of its industry peers.
In the last couple of years the Operating Margin of GMED has declined.
GMED has a better Gross Margin (71.19%) than 82.18% of its industry peers.
In the last couple of years the Gross Margin of GMED has remained more or less at the same level.
Industry RankSector Rank
OM 19.38%
PM (TTM) 12.88%
GM 71.19%
OM growth 3Y0.87%
OM growth 5Y-2.42%
PM growth 3Y-2%
PM growth 5Y1.97%
GM growth 3Y-1.25%
GM growth 5Y-0.56%

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7

2. Health

2.1 Basic Checks

GMED has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
GMED has less shares outstanding than it did 1 year ago.
The number of shares outstanding for GMED has been increased compared to 5 years ago.
There is no outstanding debt for GMED. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.

2.2 Solvency

An Altman-Z score of 4.35 indicates that GMED is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.35, GMED is in the better half of the industry, outperforming 76.24% of the companies in the same industry.
The Debt to FCF ratio of GMED is 3.18, which is a good value as it means it would take GMED, 3.18 years of fcf income to pay off all of its debts.
GMED's Debt to FCF ratio of 3.18 is amongst the best of the industry. GMED outperforms 89.11% of its industry peers.
GMED has a Debt/Equity ratio of 0.10. This is a healthy value indicating a solid balance between debt and equity.
GMED has a Debt to Equity ratio of 0.10. This is comparable to the rest of the industry: GMED outperforms 58.91% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.1
Debt/FCF 3.18
Altman-Z 4.35
ROIC/WACC0.38
WACC10.12%

2.3 Liquidity

A Current Ratio of 4.47 indicates that GMED has no problem at all paying its short term obligations.
GMED's Current ratio of 4.47 is fine compared to the rest of the industry. GMED outperforms 63.86% of its industry peers.
GMED has a Quick Ratio of 2.36. This indicates that GMED is financially healthy and has no problem in meeting its short term obligations.
GMED has a Quick ratio of 2.36. This is comparable to the rest of the industry: GMED outperforms 50.00% of its industry peers.
Industry RankSector Rank
Current Ratio 4.47
Quick Ratio 2.36

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8

3. Growth

3.1 Past

The Earnings Per Share has grown by an nice 17.77% over the past year.
GMED shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.42% yearly.
Looking at the last year, GMED shows a very strong growth in Revenue. The Revenue has grown by 22.86%.
Measured over the past years, GMED shows a quite strong growth in Revenue. The Revenue has been growing by 9.97% on average per year.
EPS 1Y (TTM)17.77%
EPS 3Y6.99%
EPS 5Y9.42%
EPS growth Q2Q14%
Revenue 1Y (TTM)22.86%
Revenue growth 3Y9.2%
Revenue growth 5Y9.97%
Revenue growth Q2Q50.96%

3.2 Future

Based on estimates for the next years, GMED will show a quite strong growth in Earnings Per Share. The EPS will grow by 17.47% on average per year.
The Revenue is expected to grow by 24.28% on average over the next years. This is a very strong growth
EPS Next Y13.39%
EPS Next 2Y15.95%
EPS Next 3Y17.69%
EPS Next 5Y17.47%
Revenue Next Year51.67%
Revenue Next 2Y55.41%
Revenue Next 3Y37.61%
Revenue Next 5Y24.28%

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 accelerating.

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6

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 20.05, the valuation of GMED can be described as rather expensive.
GMED's Price/Earnings ratio is rather cheap when compared to the industry. GMED is cheaper than 85.15% of the companies in the same industry.
When comparing the Price/Earnings ratio of GMED to the average of the S&P500 Index (24.97), we can say GMED is valued inline with the index average.
Based on the Price/Forward Earnings ratio of 16.71, the valuation of GMED can be described as correct.
Based on the Price/Forward Earnings ratio, GMED is valued cheaper than 88.12% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.05, GMED is valued at the same level.
Industry RankSector Rank
PE 20.05
Fwd PE 16.71

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, GMED is valued cheaper than 82.18% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, GMED is valued cheaper than 82.67% of the companies in the same industry.
Industry RankSector Rank
P/FCF 49.64
EV/EBITDA 18.77

4.3 Compensation for Growth

The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent 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 17.69% in the coming years.
PEG (NY)1.5
PEG (5Y)2.13
EPS Next 2Y15.95%
EPS Next 3Y17.69%

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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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