Globus Medical Q4/12 SOLID AS EXPECTED; 2013 GUIDANCE IN LINE FOR YEAR

GMED : NYSE : US$13.82
BUY 
Target: US$22.00

COMPANY DESCRIPTION:
Globus is a medical device company focused exclusively on the design, development, and commercialization of products that promote healing in patients with spine disorders. All amounts in US Dollars.

Investment recommendation


We reiterate our BUY rating on Globus following a solid Q4/12. Best-inclass top-line growth combined with strong operating margins reinforce
our thesis of Globus offering investors multiple opportunities to create value. Net, net we are encouraged by Q4/12 results that slightly
outperformed our and consensus expectations. Our thesis remains intact given continuous new product flow combined with distribution
expansion and best in-class financial discipline that positions the company well for both top- and bottom-line growth in 2013 and beyond.
Investment highlights
 Q4/12 results of $100.5M/$0.22 were above our and consensus estimates for $99.2M/$0.18 and $99.1M/$0.19.
 Breakdown of Y/Y revenue growth in the Q4/12: Innovative fusion +3%, Disruptive technologies +35% Y/Y; US grew +13%, and International +36%. Disruptive tech and US drove results.
 Favorable guidance for double-digit revenue growth, ~13%, and adjusted EBITDA of 34%-35% (inclusive of ~ 180bps impact from the medical device tax) vs our expectation for 12% and 33.7%.
Valuation
We are maintaining our $22.00 price target based on a 24.0x PE multiple applied to our 2014 EPS estimate of $0.92

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