Analyst Note| Debbie S. Wang |
Zimmer Biomet delivered solid first-quarter results that generally reflected the rise and fall of COVID-19 across various geographies. We’ve boosted our fair value estimate to $192 per share, fueled primarily by faster-than-expected resumption of large joint replacement procedure through 2021, the backlog of patients that should support growth into 2022, the impending launch of Persona IQ, and ongoing placement of Rosa robots. Time value of money is a secondary contributor to the increase. Though the firm’s turnaround was hampered by the pandemic through most of 2020, external conditions didn’t seem to keep Zimmer Biomet from making progress on its innovation and commercialization capabilities that leave the firm well positioned to accelerate growth through the midterm, from our perspective. All of these developments underscore our confidence in Zimmer Biomet’s wide economic moat.