GMED Stock Rides on NuVasive Synergy Benefits Amid Macro Issues

Globus Medical GMED continues to gain from surging demand for its Musculoskeletal Solutions products. However, a challenging macroeconomic scenario continues to plague Globus Medical. The stock carries a Zacks Rank #3 (Hold) currently.Factors Driving GMED's SharesGlobus Medical is gaining market share in the musculoskeletal solutions space, banking on the strong performance of its implantable devices, biologics, accessories and unique surgical instruments used in an expansive range of spinal, orthopedic and neurosurgical procedures. The company is particularly seeing notable gains across its product portfolio in expandables, biologics, MIS screws, 3D printed implants and cervical offerings.In the third quarter, Globus' proforma musculoskeletal revenues (assuming NuVasive revenue in the year-ago period) improved 5.4%, marking it the fourth consecutive quarter of pro forma musculoskeletal revenue growth. The growth was driven primarily by strong contributions from the company’s U.S. and international spine businesses. Third-quarter Enabling Technologies revenues grew 39% year over year, driven by increased sales within the U.S. market across the EGPS and E3D products.During the third quarter of 2024, the company launched four new products. Among the launches, we should mention the Excelsius Navigation Hub that pairs navigational accuracy with patient safety features. It is currently the only freehand navigation system on the market to offer the versatility of three distinct imaging workflows.The Actify 3D Total Knee system pairs cementless reconstruction with operative efficiency and anatomic fit. Actify 3D complements the Excelsius Flexrobot with the TKA total knee Arthroplasty application that received FDA clearance in late second-quarter 2024. Within trauma, the company launched the CAPTIVATE SOLA headless compression screw system that provides a fast and efficient solution for fracture repair, bone reconstruction, joint fusion, osteotomy and arthrodesis.Globus Medical, Inc. Price Globus Medical, Inc. price | Globus Medical, Inc. QuoteGlobus Medical merged its business with NuVasive. The combined company has formed a global musculoskeletal company focused on rapid innovation, addressing unmet clinical needs and improving offerings to surgeons and patients. The combination capitalizes on GMED’s complementary commercial organization and should allow the company to accelerate its globalization strategies to increase customer reach and strengthen surgeon relationships.The combined company is working to bring best-in-class technologies to create a differentiated and comprehensive procedural solution offering as part of its approach to address unmet clinical needs and support surgeons and patients. Earlier, management noted that the combined company expects to generate a total of $170 million of synergies over three years as a result of the merger with NuVasive, 40% being realized in year one, 70% by the end of year two, and 100% in year three.In terms of the latest development, in the third quarter, the combined trauma and NSO business delivered 99% growth, driven by continued strong performance and market penetration of the base trauma business, combined with the fast uptake of the NuVasive specialty orthopedic growth now.Over the past three months, shares of GMED have gained 24.3% compared with the industry’s 0.2% growth. The company is experiencing benefits from the NuVasive business integration. With its consistent focus on strategic market expansion and new product launches, we expect the stock to retain its bullish momentum in the coming days.Concerning Factors for GMEDLike other industry players, Globus Medical is currently grappling with negative trends in the global economy, including interest rate fluctuations, increases in inflation and financial market volatility. These factors are adversely impacting the company’s operations and financial performance. The increasing geopolitical complexities across the globe, in particular, have led to a significant rise in raw material and freight costs for the company. In the third quarter, the company incurred a 99.8% surge in the cost of goods sold. The macroeconomic factors, along with rising wage and raw material costs, are also leading to a significant escalation in the company’s operating expenses. SG&A expenses in the reported quarter were up 54.1% from the year-ago quarter.Further, the presence of a large number of players made the musculoskeletal devices market intensely competitive. The orthopedic industry, in particular, is highly competitive with the presence of more prominent players like Zimmer Biomet, Stryker, Johnson & Johnson’s DePuy, Smith & Nephew, and Medtronic. Globus Medical needs to constantly introduce or acquire new products to withstand the competitive pressure and maintain its market share.Key PicksSome better-ranked stocks in the broader medical space are Veracyte VCYT, ResMed RMD and Omnicell OMCL.Veracyte, carrying a Zacks Rank #1 (Strong Buy) at present, has an estimated earnings growth rate of 65.8% for 2025. You can see the complete list of today’s Zacks #1 Rank stocks here.VCYT’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 520.58%. Veracyte’s shares have risen 49.2% in the past year compared with the industry’s 5.5% growth.ResMed, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 21.1% for 2025. RMD’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 6.41%. Its shares have risen 34.1% compared with the industry’s 7.7% growth in the past year.Omnicell, carrying a Zacks Rank #2 at present, has an estimated earnings growth rate of 72.7% for fourth-quarter 2024. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 121.74%. OMCL’s shares have risen 26.4% against the industry’s 15.7% decline in the past year.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 228 positions with double- and triple-digit gains in 2023 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Omnicell, Inc. (OMCL): Free Stock Analysis Report ResMed Inc. (RMD): Free Stock Analysis Report Globus Medical, Inc. (GMED): Free Stock Analysis Report Veracyte, Inc. (VCYT): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks