Advertisement
U.S. markets close in 4 hours 42 minutes
  • S&P 500

    5,254.07
    +5.58 (+0.11%)
     
  • Dow 30

    39,744.00
    -16.08 (-0.04%)
     
  • Nasdaq

    16,399.98
    +0.46 (+0.00%)
     
  • Russell 2000

    2,127.33
    +12.98 (+0.61%)
     
  • Crude Oil

    82.61
    +1.26 (+1.55%)
     
  • Gold

    2,236.70
    +24.00 (+1.08%)
     
  • Silver

    25.03
    +0.28 (+1.14%)
     
  • EUR/USD

    1.0799
    -0.0030 (-0.28%)
     
  • 10-Yr Bond

    4.1940
    -0.0020 (-0.05%)
     
  • GBP/USD

    1.2628
    -0.0010 (-0.08%)
     
  • USD/JPY

    151.2380
    -0.0080 (-0.01%)
     
  • Bitcoin USD

    71,204.09
    +2,000.97 (+2.89%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,974.19
    +42.21 (+0.53%)
     
  • Nikkei 225

    40,168.07
    -594.66 (-1.46%)
     

Zimmer (ZBH) Plagued by Various Internal and External Issues

On Aug 14, we issued an updated research report on Warsaw, IN-based Zimmer Biomet Holdings Inc. ZBH, a leading musculoskeletal healthcare company. It designs and distributes orthopedic reconstructive products, spine, bone healing, thoracic products, dental implants and related surgical products.

Over the last three months, Zimmer Biomet was trading below the industry on factors like macroeconomic uncertainties, pricing pressure and unfavorable currency fluctuations. The stock has till now lost 4.5% compared against the industry’s 4% gain.

With the company delivering a dull second-quarter result, we expect this downside to continue in the upcoming period. Per management, the company is still fighting headwinds such as slump in knee business, shortage in supply of some products, thus leading to inability to recapture the lost customers across the United States and gain new ones. Also, the trimmed 2017 guidance adds to our concerns indicating slim chances of recovery ahead.

The market also seems to be apprehensive about the departure of Zimmer Biomet’s decade-old CEO David C. Dvorak. Notably, during his 10-year tenure, Zimmer Biomet has transformed into a global leader in musculoskeletal healthcare. Through a combination of organic growth and strategic acquisitions, the company’s revenue has doubled in this phase and it has introduced a broad portfolio of technologies, solutions and personalized services.

Only time will tell if the stepping down of Drovak leaves an adverse impact on the company’s business. Currently, we remain on the sidelines until further visibility is obtained on this matter.

On a positive note, we look forward to the ongoing synergy from the LDR Holding acquisition, which should broaden and complement the company’s musculoskeletal offering. This is in line with the strategy to grow through inorganic means by focusing on mega mergers.

Management is also striving to develop a strong spine portfolio in order to cash in on the opportunities. The company’s spine offerings such as Mobi-C Cervical Disc prosthesis and Vitality Spinal Fixation System showed a considerable progress in performance.

Zimmer Biomet has been of late working to strengthen its foothold in the emerging markets providing long-term opportunities. The company’s strategic investments in these regions over several quarters with a view to enhance operational and sales performance are yielding results.

Zacks Rank & Key Picks

Zimmer Biomet currently carries a Zacks Rank #4 (Sell).

Some of the better-ranked medical stocks are IDEXX Laboratories, Inc. IDXX, Lantheus Holdings, Inc. LNTH and Align Technology, Inc. ALGN. While Align Technology sports a Zacks Rank #1 (Strong Buy), Lantheus Holdings and IDEXX Laboratories carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

IDEXX Laboratories has a long-term expected earnings growth rate of 19.8%. The stock has gained around 6.8% over the last six months.

Lantheus Holdings has a long-term expected earnings growth rate of 12.5%. The stock has surged 70.4% over the last six months.

Align Technology has a long-term expected earnings growth rate of 26.6%. The stock has rallied roughly 22.3% over the last three months.

4 Surprising Tech Stocks to Keep an Eye on

Tech stocks have been a major force behind the market’s record highs, but picking the best ones to buy can be tough. There’s a simple way to invest in the success of the entire sector. Zacks has just released a Special Report revealing one thing tech companies literally cannot function without. More importantly, it reveals 4 top stocks set to skyrocket on increasing demand for these devices. I encourage you to get the report now – before the next wave of innovations really takes off.

See Stocks Now>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
IDEXX Laboratories, Inc. (IDXX) : Free Stock Analysis Report
 
Zimmer Biomet Holdings, Inc. (ZBH) : Free Stock Analysis Report
 
Lantheus Holdings, Inc. (LNTH) : Free Stock Analysis Report
 
Align Technology, Inc. (ALGN) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

Advertisement