Press Release: Globus Medical Launches Excelsiushub(Tm) Navigation System

Cardinal Health CAH recently launched the Kendall SCD SmartFlow Compression System in the United States. The system is the next generation of the Kendall Compression Series, offering an enhanced clinician and patient experience.

Kendall SCD SmartFlow Compression System is designed to help prevent venous thromboembolism events, enhance blood circulation and treat pain and swelling related to venous stasis.

Likely Trend of CAH Stock Following the News

Following the announcement, shares of the company moved moved 2.8% north to $123.42 at yesterday’s closing. In the year-to-date period, CAH shares have gained 22.4% compared with the industry’s 3.6% growth. The S&P 500 increased 24.5% in the same time frame.

Meanwhile, CAH currently has a market capitalization of $29.1 billion. In the last reported quarter, CAH delivered an earnings surprise of 14.6%.

Insulet Corp. PODD announced that its Omnipod 5 Automated Insulin Delivery (“AID”) System is now compatible with Abbott’s ABT FreeStyle Libre 2 Plus continuous glucose monitoring (CGM) sensor in the United States. The latest development represents a significant step forward in the company’s efforts to expand access to its innovative, tubeless Omnipod 5 AID System for more people.

In August 2024, the FDA cleared Omnipod 5 for use by people with type 2 diabetes (18 years and above), expanding the technology to nearly six million insulin-requiring people in the United States.

PODD Stock’s Likely Trend Following the News

Following the announcement on Nov. 20, PODD shares climbed 1.8% on Wednesday, finishing at $266.58. The company’s solid innovation efforts and ongoing expansion of the Omnipod 5 platform are solidifying its market leadership. We expect the market sentiment toward PODD stock to remain positive surrounding this development.

Insulet has a market capitalization of $18.70 billion at present. Going by the Zacks Consensus Estimate, the company’s earnings are likely to increase 17.1% in 2024 on a 21.2% improvement in revenues. In the trailing four quarters, it delivered an earnings beat of 52.4%, on average.

Growing Presence of Insulet’s Omnipod 5

Insulet’s Omnipod 5 System simplifies diabetes management and has shown an improvement in results by removing the need for multiple daily injections (MDI) therapy and automatically adjusting insulin delivery every five minutes using its advanced SmartAdjust technology. As the most prescribed and preferred pump in the United States, the waterproof, discreet and wearable Omnipod 5 is the first tubeless AID system that communicates with a CGM, proactively correcting for highs and helping protect against lows, day and night. The company states that the latest development will enable millions of Americans who take insulin to use Pod therapy with their preferred CGM sensor.

The full U.S. market release of Omnipod 5 with Dexcom’s G7 CGM took place in June this year. Expanding global access to Omnipod 5 has been one of the top priorities for Insulet. Following a successful limited market release, Insulet made a full commercial launch of Omnipod 5 with Dexcom G6 and Abbott’s FreeStyle Libre 2 Plus in the United Kingdom and the Netherlands for individuals aged two years and older with type 1 diabetes. In France, Omnipod 5 is compatible with the G6 CGM and has received reimbursement status from the French National Authority for Health.

Industry Prospects Favoring Insulet

Per a Research report, the global diabetes devices market was valued at $30.31 billion in 2023 and is expected to witness a compound annual rate of 7.5% through 2030. The market is mainly being driven by the growing prevalence of diabetes, the rising usage of insulin-delivery devices and high obesity rates. The market is characterized by a high degree of innovation, focusing on creating solutions for more accurate and efficient diagnosis and treatment.

Other Developments in Insulet

Last month, Insulet announced the full market release of the Omnipod 5 App for iPhone in the United States. The app offers unique capabilities, such as a Custom Foods feature that allows users to input, save and list carbohydrate counts for their typical meal sizes, favorite foods and snacks. Users can select from their personalized list of foods when using the SmartBolus Calculator to determine how much insulin to receive for a meal, minimizing carb counting and simplifying mealtime math.

PODD Stock Price Performance

In the past year, Insulet shares have risen 40.6% compared with the industry’s growth of 19.8%.

PODD’s Zacks Rank and Key Picks

Insulet currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space are Penumbra PEN and Globus Medical GMED, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Penumbra’s shares have risen 16.4% in the past year. Estimates for the company’s 2024 earnings per share have jumped 8.1% to $2.79 in the past 30 days. PEN’s earnings beat estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 10.54%. In the last reported quarter, it posted an earnings surprise of 23.19%.

Estimates for Globus Medical’s 2024 earnings per share have increased 0.4% to $2.95 in the past 30 days. Shares of the company have surged 14% in the past year against the industry’s 4.1% fall. GMED’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 17.65%. In the last reported quarter, it delivered an earnings surprise of 27.69%.

Zacks Investment Research

Chemed CHE continues to be hurt by macroeconomic impacts on business, seasonality factors and the competitive landscape. The challenges within the Roto-Rooter business dented the third quarter result. The stock carries a Zacks Rank #4 (Sell) at present.

Concerning Factors Pulling CHE Stock Down

The Roto-Rooter business has been navigating the ongoing headwinds in consumer sentiment and consumer spending within its sector. Recently, hit by the business’s ongoing challenges, management has decided to look for a new marketing agency to provide a fresh look at how Roto-Rooter's paid search program is operating. That process culminated in Roto-Rooter transitioning to a new SEM in early July.

The ramp-up time required by the new provider contributed to some of the softness in demand residential revenues experienced in the third quarter. However, management is optimistic that the new provider will soon overcome this situation and will provide more positive results going forward.

Further, the ongoing global economic conditions, such as general labor, supply chain and inflationary pressure, along with political and regulatory developments, are escalating expenses, particularly in staffing and labor costs. In recent times, Chemed’s performance has been affected by the inflationary trend, increased logistics costs, and higher employee-related expenses. In the third quarter, the cost of services provided and goods sold rose 9.3% year over year, while selling, general & administration expenses increased 2.4%.

Meanwhile, Chemed’s Roto-Rooter operates in the highly competitive market for sewer, drain, and pipe cleaning and plumbing repair businesses. Competition is fragmented in most markets, with local and regional firms providing much of the competition. Besides, Hospice care in the United States is competitive as programs for hospice services are generally uniform. As the hospice care industry is highly fragmented, VITAS competes with a large number of organizations based on its ability to deliver quality, responsive services. Both these segments could face challenges in their operations if they are unable to innovate and effectively respond to market trends.

Chemed Corporation Price

Chemed Corporation price | Chemed Corporation Quote

Over the past three months, CHE’s shares dipped 1.6% compared to the industry’s 0.1% drop. Although management expects the Roto-Rooter business to overcome the ongoing crisis, the estimated time of revival is still unclear.

Favorable Factors for CHEMED

Chemed’s VITAS segment is consistently registering accelerated improvement, supported by increased growth in licensed healthcare professionals and strong admissions. Corresponding growth in the patient census has returned VITAS to normalized operating conditions.

VITAS’ performance was solid in the third quarter, with 17.3% growth year over year, backed by a full-quarter contribution from the $85 million acquisition of Covenant Health. This acquisition boosted VITAS’ operational metrics, including a 6.3% improvement in admissions and a 15.5% increase in ADC (Average Daily Census). Management is optimistic about VITAS consistently demonstrating the ability to accelerate the hiring and retention of licensed healthcare professionals.

Within the Hospice segment, we believe that Chemed is well poised to register growth driven by the growing aging population. As people age, the prevalence of chronic and life-limiting illnesses, such as cancer, heart disease and dementia, also increases. This demographic trend drives the hospice market, creating a greater demand for end-of-life care and supportive services.

Further, growing long-term care services for chronic diseases worldwide, such as COPD and heart failure, are likely to boost companies' growth within the industry. According to a report by Market Data Forecast, the global hospice market is estimated to witness a CAGR of 9.1% between 2023 and 2028.

Key Picks

Some better-ranked stocks in the broader medical space are Haemonetics HAE, Globus Medical GMED and ResMed RMD. While ResMed sports a Zacks Rank #1 (Strong Buy) at present, Haemonetics and Globus Medical carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Haemonetics has an earnings yield of 5.02% compared with the industry’s 1.18%. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 19.39%. Its shares have risen 1.8% compared with the industry’s 23.1% growth in the past year. Estimates for Haemonetics’ 2025 EPS have moved north 0.4% to $4.59 in the past 30 days.

Estimates for Globus Medical’s 2024 EPS have remained constant at $2.84 in the past 30 days. Shares of the company have surged 60.6% in the past year compared with the industry’s growth of 32.7%. GMED’s earnings surpassed estimates in each of the trailing four quarters, the average beat being 12.1%. In the last reported quarter, it delivered an earnings surprise of 10.3%.

Estimates for ResMed’s fiscal 2025 EPS have risen 2.7% in the past 30 days. Shares of the company have surged 86.3% in the past year compared with the industry’s 32.1% growth. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average beat being 6.4%. In the last reported quarter, it delivered an earnings surprise of 8.4%.

Zacks Investment Research

QIAGEN's QGEN business is expected to get a boost from its growing molecular diagnostic market, expanded test menu and growth-driving strategic collaborations. Yet, the company faces a challenging macro environment. An intense competitive environment and exchange rate fluctuations may dent the results of operations. The stock carries a Zacks Rank #3 (Hold) at present.

Factors Driving QGEN Stock

Molecular testing is the most dynamic segment of the global in vitro diagnostics market. QIAGEN offers one of the broadest portfolios of molecular technologies for healthcare. The range of assays for diseases and biomarkers speeds up and simplifies laboratory workflow and standardizes many lab procedures.

QGEN has more than 30 master collaboration agreements with pharmaceutical industry customers, some with multiple co-development projects. In the third quarter of 2024, sales in the Diagnostic Solutions product group grew 10% compared with the year-ago period, driven by solid gains in consumables sales. The QuantiFERON test delivered its sixth consecutive quarter of sales above $100 million, supported by solid demand from conversion gains against the tuberculin skin test in all regions.

To support internal growth, QIAGEN heavily invests in research and development (R&D) for the menu expansion of its key platforms. R&D expenditures represented 8.9% of the third-quarter sales, anticipating a further rise in the coming months as the company pursues regulatory approvals of certain assays or instruments. QIAGEN marked several important product launches and key milestones, positioning it well to meet its 2028 goals. Particularly, QIAstat drove 40% CER sales growth from increasing demand worldwide and more than 150 placements of instruments.

In September, the QIAstat-Dx syndromic testing systems and associated assays received CE-marking under the European Union's new In-Vitro Diagnostic Medical Devices Regulation. Building on the success in syndromic testing, QIAGEN is also expanding the ecosystem for QIAstat into precision medicine, signing a number of pharma collaborations to use this technology in precision medicine applications.

QIAGEN N.V. Price

QIAGEN N.V. price | QIAGEN N.V. Quote

QIAGEN’s long-term business strategy involves entering into strategic alliances and marketing and distribution arrangements with academic, corporate and other partners relating to the development, commercialization, marketing and distribution of certain of their existing and potential products. In September 2024, the company announced a collaboration with Eli Lilly and Company to support the development of a QIAstat-Dx in-vitro diagnostic to detect APOE genotypes, which can play a key role in Alzheimer’s disease diagnosis.

The company also extended its strategic partnership with Bio-Manguinhos/Fiocruz to enhance malaria and dengue detection in Brazil’s national screening programs. Another agreement expands its collaboration with AstraZeneca beyond oncology to develop and commercialize CDx in chronic diseases.

Year to date, shares of QGEN have lost 5.5% compared with the industry’s 10.3% decline. The company continues to benefit from favorable molecular diagnostics industry dynamics. With its consistent focus on expansion through strategic collaborations and research and development, we expect the stock to gain momentum in the coming days.

Factors Impeding QGEN's Growth

QIAGEN currently markets products in more than 100 countries. Its international operations are subject to a variety of risks arising from the economy, political outlook, language and cultural barriers in the countries it operates. In many of these emerging markets, QIAGEN faces several risks, which include economies that may be dependent on only a few products and are therefore subject to significant fluctuations, weak legal systems that may affect its ability to enforce contractual rights, exchange controls, unstable governments, and privatization or other government actions affecting the flow of goods and currency.

In the quarter under review, sales in the Asia Pacific, Japan and the Rest of World region declined 2% year over year, reflecting challenging macro demand trends in China.

Recording more than 50% of its revenues from the international market, QIAGEN is highly exposed to the risk of foreign currency movement. The situation may worsen with the strengthening of the domestic currency against high-focus nations. Any unanticipated currency headwinds in high-focus markets may drag the top and the bottom line further in the future. For instance, foreign currency transactions in the third quarter of 2024 resulted in net losses of $1.1 million. The company continues to expect currency movements against the U.S. dollar to have a negative impact on full-year net sales of about 1% point and an adverse effect of about 2 cents per share on adjusted EPS results.

Considering QIAGEN’s huge gamut of services, the company is also susceptible to competitive headwinds. The company is facing increasing competition from firms that provide competitive pre-analytical solutions and other products used by QIAGEN’s customers. The markets for some of the company’s products are very competitive and price-sensitive. Other product suppliers may have significant advantages in terms of financial, operational, sales, and marketing resources, as well as experience in research and development.

Key Picks

Some better-ranked stocks in the broader medical space are Haemonetics HAE, Globus Medical GMED and ResMed RMD. While ResMed sports a Zacks Rank #1 (Strong Buy) at present, Haemonetics and Globus Medical carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Haemonetics has an earnings yield of 5.02% compared with the industry’s 1.18%. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 19.39%. Its shares have risen 1.8% compared with the industry’s 23.1% growth in the past year. Estimates for Haemonetics’ 2025 EPS have moved north by 0.4% to $4.59 in the past 30 days.

Estimates for Globus Medical’s 2024 EPS have remained constant at $2.84 in the past 30 days. Shares of the company have surged 60.6% in the past year compared with the industry’s growth of 32.7%. GMED’s earnings surpassed estimates in each of the trailing four quarters, the average beat being 12.1%. In the last reported quarter, it delivered an earnings surprise of 10.3%.

Estimates for ResMed’s fiscal 2025 EPS have risen 2.7% in the past 30 days. Shares of the company have surged 86.3% in the past year compared with the industry’s 32.1% growth. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average beat being 6.4%. In the last reported quarter, it delivered an earnings surprise of 8.4%.

Zacks Investment Research

Have you been paying attention to shares of Globus Medical (GMED)? Shares have been on the move with the stock up 15.3% over the past month. The stock hit a new 52-week high of $85.01 in the previous session. Globus Medical has gained 59.3% since the start of the year compared to the -0.2% move for the Zacks Medical sector and the 5.4% return for the Zacks Medical - Instruments industry.

What's Driving the Outperformance?

The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on November 5, 2024, Globus Medical reported EPS of $0.83 versus consensus estimate of $0.65 while it beat the consensus revenue estimate by 3.44%.

For the current fiscal year, Globus Medical is expected to post earnings of $2.95 per share on $2.5 billion in revenues. This represents a 27.16% change in EPS on a 59.19% change in revenues. For the next fiscal year, the company is expected to earn $3.43 per share on $2.67 billion in revenues. This represents a year-over-year change of 16.13% and 6.76%, respectively.

Valuation Metrics

Globus Medical may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.

On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.

Globus Medical has a Value Score of B. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of A.

In terms of its value breakdown, the stock currently trades at 28.7X current fiscal year EPS estimates, which is a premium to the peer industry average of 28.5X. On a trailing cash flow basis, the stock currently trades at 23.5X versus its peer group's average of 17X. Additionally, the stock has a PEG ratio of 2.04. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks Rank

We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Globus Medical currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Globus Medical fits the bill. Thus, it seems as though Globus Medical shares could still be poised for more gains ahead.

How Does GMED Stack Up to the Competition?

Shares of GMED have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Penumbra, Inc. (PEN). PEN has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of D.

Earnings were strong last quarter. Penumbra, Inc. beat our consensus estimate by 23.19%, and for the current fiscal year, PEN is expected to post earnings of $3.83 per share on revenue of $1.19 billion.

Shares of Penumbra, Inc. have gained 16.4% over the past month, and currently trade at a forward P/E of 86.15X and a P/CF of 85.05X.

The Medical - Instruments industry is in the top 22% of all the industries we have in our universe, so it looks like there are some nice tailwinds for GMED and PEN, even beyond their own solid fundamental situation.

Zacks Investment Research