GMED : NYSE : US$24.15
BUY Target: US$28.00
Globus is a medical device company focused exclusively on the design, development, and commercialization of products that promote healing in patients with spine disorders.
All amounts in US$ unless otherwise noted
Life Sciences — Biomedical Devices and Services Q4/13 SOLID AS EXPECTED; NEW PRODUCTS AND DISTRIBUTION SET TO DRIVE 2014 AND BEYOND; MAINTAIN BUY AND $28 TARGET
We maintain our BUY rating on Globus following a solid Q4/13. Globus’s ability to continue to take share and generate strong operating margins reinforces our thesis that the company offers investors multiple opportunities to create value. Our thesis remains intact and we are buyers of Globus into 2014 as the company looks well positioned for growth via continuous new product flow, significant distribution expansion in 2013, and best in-class financial discipline.
Investment highlights Q4/13 revenue of $115.2M was solid and in line with the preliminary numbers. Pro forma EPS of $0.25 came in well above our and consensus estimates of $0.22 on higher-than-expected operating leverage.
Sixteen new product launches in 2013 and significant new rep additions position Globus for accelerating growth into 2014.
Management reiterated 2014 guidance for revenues in the range of $480M-$486M, and EPS of $0.90-$0.92
Valuation We are maintaining our $28.00 price target based on a 26.8x PE multiple applied to our 2015 EPS estimate of $1.04.