Needham has upgraded Globus Medical (NYSE: GMED) from Hold to Buy and assigned a price target of $112.00 after the company issued a preliminary revenue preannouncement for the fourth quarter. That target implies roughly a 24% premium to the stock's current price of $90.22 and aligns with InvestingPro data showing the shares trading below their Fair Value, with analyst targets reaching as high as $118.
In its rationale, Needham pointed to margin dynamics as a key catalyst. The research note referenced Nevro's EBITDA margin reaching an estimated 20% and called out expectations for continued margin expansion in 2026. Needham's analysis suggests that such margin improvements could translate into high-single to low-double digit percentage upside to Globus Medical's 2026 earnings-per-share guidance.
The firm also noted the company's existing earnings base, reporting current EBITDA of $799.64 million. Needham cited InvestingPro Tips that indicate net income is expected to grow this year, using that outlook to bolster the case for the rating change.
Beyond margins, Needham expressed optimism about the potential for improving organic growth at Globus Medical and said there may be upside to the company's existing revenue guidance. The combination of stronger organic sales and margin expansion is viewed as a possible driver of incremental multiple expansion for the stock.
Needham further quantified its view with Bull-Bear EPS scenarios, which the firm said point to an attractive risk-reward profile for investors considering exposure to the shares.
Globus Medical, a medical device company focused on musculoskeletal solutions, announced preliminary fourth-quarter 2025 revenue of approximately $823.2 million, a 25.2% increase from the same period in 2024. The company expects full-year 2025 sales to total roughly $2.936 billion, representing 16.5% growth compared with the prior year. The rating change from Needham followed that preliminary fourth-quarter revenue announcement and initial 2026 guidance.
Other sell-side activity has reflected the stronger-than-expected results. Jefferies raised its price target to $115 while maintaining a Buy rating. Canaccord Genuity lifted its target to $112 and retained a Buy rating. TD Cowen initiated coverage with a Buy rating and a $110 price target. By contrast, Citizens reiterated a Market Perform rating in the wake of the preannouncement and initial 2026 guidance.
Taken together, the updated analyst views and higher price targets indicate broadly positive sentiment among market analysts about Globus Medical's recent financial performance and near-term outlook.
Implications for markets and sectors - The developments primarily affect the medical device sector and health-care equipment suppliers, with potential ripple effects for equity investors focused on medical technology and growth-oriented health-care stocks.
Information limitations - The upgrade and supporting analysis are based on the company's preliminary revenue announcement and the analysts' internal scenario modeling; further details are subject to updates when full results and formal guidance are released.