Globus Medical (GMED)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 58.90% | 65.05% | 74.22% | 75.03% | 72.44% |
| Operating profit margin | 6.59% | 8.49% | 22.29% | 17.95% | 14.12% |
| Pretax margin | 4.79% | 10.54% | 23.76% | 18.83% | 15.96% |
| Net profit margin | 4.09% | 7.83% | 18.59% | 15.57% | 12.96% |
The Gross Profit Margin of Globus Medical has shown a consistent decline from 2020 to 2024, starting at 72.44% and dropping to 58.90%. This may indicate that the company's cost of goods sold has been increasing faster than its revenues during this period.
The Operating Profit Margin has exhibited fluctuations over the years, with a notable increase in 2022 but a subsequent decrease in 2023 and 2024. These changes suggest some variability in the company's operating efficiency and cost management.
The Pretax Margin of Globus Medical has demonstrated a similar pattern as the Operating Profit Margin, indicating that the company's pre-tax profitability has experienced some ups and downs, possibly due to changes in operating expenses or non-operating items.
The Net Profit Margin has also shown a consistent decrease over the years, dropping from 12.96% in 2020 to 4.09% in 2024. This declining trend suggests that the company's bottom line profitability has been eroding, potentially due to increasing expenses relative to revenues.
In summary, while Globus Medical has maintained relatively healthy profitability margins compared to industry averages, the downward trends in Gross Profit Margin, Operating Profit Margin, Pretax Margin, and Net Profit Margin signal potential challenges in cost management and overall profitability sustainability that may require attention and strategic adjustments.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 3.16% | 2.62% | 10.98% | 8.79% | 6.63% |
| Return on assets (ROA) | 1.96% | 2.42% | 9.16% | 7.62% | 6.09% |
| Return on total capital | 5.26% | 5.05% | 12.80% | 10.36% | 7.67% |
| Return on equity (ROE) | 2.47% | 3.07% | 10.30% | 8.57% | 6.79% |
The profitability ratios of Globus Medical show fluctuating trends over the years.
1. Operating return on assets (Operating ROA) increased from 6.63% in December 31, 2020, to 10.98% in December 31, 2022, demonstrating an improvement in the company's ability to generate operating profits from its assets. However, there was a decline to 2.62% by December 31, 2023, and a slight increase to 3.16% by December 31, 2024.
2. Return on assets (ROA) followed a similar pattern, with an increase from 6.09% in December 31, 2020, to 9.16% in December 31, 2022. Nevertheless, there was a notable decrease to 1.96% by December 31, 2024, indicating a decline in the company's overall profit generation efficiency.
3. Return on total capital also displayed an upward trend, rising from 7.67% in December 31, 2020, to 12.80% by December 31, 2022. However, there was a decline to 5.26% by December 31, 2024, suggesting a decrease in the returns generated from the total capital employed.
4. Return on equity (ROE) improved from 6.79% in December 31, 2020, to 10.30% by December 31, 2022. Nonetheless, there was a significant drop to 2.47% in December 31, 2024, indicating a decrease in the returns available to the company's shareholders.
In summary, Globus Medical's profitability ratios have shown varying performance levels over the years, with improvements noted in certain ratios but declines observed in others. The company may need to focus on enhancing its efficiency in generating profits and returns to ensure sustainable financial performance.