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Globus Medical, Inc. (GMED) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Globus Medical, Inc. (GMED)

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Intrinsic Value (DCF)

Current$93.89
→
Intrinsic$105.66
+13%
$72.51$105.66$168.56
Market implies 22% growth for 5 years
GMED appears fairly valued — current price aligns with our DCF estimate.
At $94, the market prices in continued strong cash flow growth (22%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $73 → Bull $169. Current price implies expectations below the base case, but well above the bear case.
Discount ↓Growth →21%23%25%27%
8%$130$140$151$162
10%$91$98$106$114
12%$70$75$81$87
14%$57$61$65$70

Bull Case

  • Bull case ($169) offers 80% upside at 30% growth, 9% discount
  • 11% margin of safety vs. base case estimate
  • Market-implied growth (22%) ≤ historical CAGR (25%)

Bear Case

  • Bear case ($73) implies 23% downside at 20% growth, 12% discount
  • Using 25% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$506.51M
Year 2$633.14M
Year 3$791.42M
Year 4$989.28M
Year 5$1.24B
Terminal$18.20B

📐 Model Inputs

Growth Rate25.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$405.21MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is GMED stock undervalued or overvalued?
🟡 FAIRLY VALUED

GMED trades at $93.89, within 10% of our $87.84 intrinsic value estimate. At 10.0% WACC and 25.0% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $58.23 (bear) to $131.44 (bull).

What is GMED's intrinsic value?

Using a 5-year DCF model: Base FCF of $405M, projected at 25.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $-247M net debt and dividing by 0.14B shares: Bear $58.23 | Base $87.84 | Bull $131.44. Current price $93.89 implies -6% to base case.

How is GMED's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 25.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($11.86B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.