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Zimmer Biomet Holdings Inc ZBH

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Zimmer Biomet Gains Steam in First Quarter; Raising Our Fair Value Estimate

Debbie S. Wang Senior Equity Analyst

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.

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Company Profile

Business Description

Zimmer Biomet designs, manufactures, and markets orthopedic reconstructive implants, as well as supplies and surgical equipment for orthopedic surgery. With the acquisitions of Centerpulse in 2003 and Biomet in 2015, Zimmer holds the leading share of the reconstructive market in the United States, Europe, and Japan. Roughly 60% of total revenue is derived from sales of large joints, another 22% comes from extremities and trauma; the remaining portion is primarily related to spine and dental products.

345 East Main Street
Warsaw, IN, 46580
T +1 574 267-6131
Sector Healthcare
Industry Medical Devices
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2020
Stock Type Distressed
Employees 20,000