Zimmer Biomet Sees Mixed Results Amid Market Challenges
Warsaw, Indiana-based Zimmer Biomet Holdings, Inc. (ZBH) focuses on creating and marketing innovative orthopedic solutions. Aiming to help surgeons and clinicians restore patient mobility, alleviate pain, and enhance overall quality of life, Zimmer Biomet has established a strong presence in the medical devices industry. Boasting a market cap of $21.3 billion, the company operates in over 25 countries and sells products across more than 100 nations worldwide.
Understanding Zimmer Biomet’s Market Position
With a market capitalization exceeding $10 billion, Zimmer Biomet qualifies as a “large-cap stock.” This status signifies its considerable size and influence within the medical sector.
Recent Stock Performance Overview
Zimmer Biomet’s stock has declined 19.3% from its 52-week peak of $133.90, reached on March 28. However, in the past three months, the stock has seen a slight increase of 1.7%, outperforming the modest gains of the iShares U.S. Medical Devices ETF (IHI) during the same period.
Long-term performance tells a different story. Year-to-date, ZBH has fallen 11.2%, and almost 9% over the last 52 weeks. In contrast, IHI has gained 10.1% in 2024 and 12.5% in the past year, indicating Zimmer’s struggles in comparison.
Technical Indicators and Earnings Report
Consistently, ZBH has traded below its 200-day moving average since late May and the 50-day moving average since mid-April, indicating prevailing bearish trends.
After the release of its Q3 earnings on October 30, Zimmer Biomet’s stock surged by 5.7%. The company reported a year-over-year revenue increase of over 4% to around $1.8 billion, which surpassed Wall Street’s estimates by 1.1%. This boost in performance helped to reassure investors.
Yet, the increase in selling, general, and administrative expenses by 5.2% meant that operating profits only rose by 4.8%, reaching $279.5 million. Additionally, adjusted earnings per share (EPS) of $1.74 fell short of analysts’ expectations. Moreover, the company lowered its annual revenue and earnings guidance, causing ZBH stock to drop by 2.6% in the following trading session.
Comparative Performance and Future Outlook
In terms of performance relative to peers, Zimmer Biomet has not fared well against Medtronic plc (MDT), which saw a 1.2% decline YTD and a 1.5% dip over the past year.
Despite the challenges, analysts maintain a cautiously optimistic view. With a consensus “Moderate Buy” rating among the 28 analysts covering ZBH, there is an average price target of $123.88, suggesting a 14.6% premium over current levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
