Please ensure Javascript is enabled for purposes of website accessibility

Why Globus Medical Is Soaring Today

By Brian Feroldi – Updated Apr 15, 2019 at 11:22PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Traders cheer after the company reports pleasing preliminary results for the fourth quarter and shares bullish guidance.

What happened

Shares of Globus Medical (GMED 1.45%), a medical device company focused on musculoskeletal products, rose as much as 15% in early-morning trading on Wednesday. The stock was up about 9% as of 1 p.m. EST. The bullish move can be credited to the release of preliminary results for the fourth quarter that exceeded expectations.

So what

Here's a review of the key details from the announcement:

  • Fourth-quarter sales are expected to grow 11% to $195.5 million. For context, Wall Street was only expecting revenue to be $188 million.
  • Full-year 2018 revenue is expected to increase 12% to $712.5 million. This figure also compares favorably to the $705 million that market watchers had predicted.

CEO Dave Demski credited the gains to 35% growth in the company's emerging-technologies business, which includes its newly launched robotic system.

One surgically gloved hand passes an operating instrument to another.

Image source: Getty Images.

Management also shared upbeat guidance for 2019:

  • Revenue is expected to reach $770 million. This is ahead of the $765 million in sales that the pros were expecting.
  • Non-GAAP earnings per share are expected to reach $1.72. That's $0.10 above the current consensus estimate.
  • The company expects to report its official results on Feb. 21.

The solid fourth-quarter results and bullish guidance caused traders to cheer.

Now what

The demand for Globus Medical's Excelsius GPS robotic surgical system has been strong ever since it was launched. That has helped to drive the company's revenue and profits consistently higher over the last couple of quarters. With management calling for more of the same in 2019, it isn't hard to feel bullish about this medical device maker's prospects.

Check out the latest Globus Medical earnings call transcript.

Brian Feroldi has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Stocks Mentioned

Globus Medical Stock Quote
Globus Medical
GMED
$69.95 (1.45%) $1.00

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.