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Zimmer Biomet Hurt by Supply Delay, Knee Challenges Remain
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On Nov 21, we issued an updated research report on Warsaw, IN-based Zimmer Biomet Holdings Inc. (ZBH - Free Report) . The company carries a Zacks Rank #4 (Sell).
Over the last three months, this leading musculoskeletal healthcare company was trading below the broader industry on macroeconomic uncertainties, pricing pressure and unfavorable currency fluctuations. The stock has gained 0.2% versus the broader industry’s 7% gain.
The company’s third-quarter results fell short of the Zacks Consensus Estimate and its own expectations. Per management, Zimmer Biomet is grappling with headwinds such as supply delay of certain products, leading to the inability of regaining lost customers in the United States and tapping new ones; the softened domestic market conditions; the impact of consecutive hurricanes and a significant price reduction in the Indian knee market. The trimmed 2017 guidance adds to our concerns indicating little chances of recovery ahead.
Estimate revision trend for 2017 also remains unfavorable with 17 estimates moving south and none in the opposite direction over the past month. The stock has seen the Zacks Consensus Estimate being revised 20 cents downward over this period to $8.04 per share.
On a positive note, we look forward to the expected synergies to be drawn from the recently completed LDR Holding acquisition, which should broaden and complement the company’s musculoskeletal offering. This is in line with its strategy to grow through inorganic means by focusing on mega buyouts. We are also impressed by the strong strategic and financial goals which the combined entity anticipates to reach, now that the deal has been closed.
Zimmer Biomet has been of late working to strengthen its foothold in the emerging markets that provide 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.
PetMed has a long-term expected earnings growth rate of 10%. The stock has rallied roughly 79.4% in a year.
Align Technologyhas a long-term expected earnings growth rate of 28.9%. The stock has gained 168.4% over a year.
Myriad Geneticshas a long-term expected earnings growth rate of 15%. The stock has surged 91.6% in a year.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Zimmer Biomet Hurt by Supply Delay, Knee Challenges Remain
On Nov 21, we issued an updated research report on Warsaw, IN-based Zimmer Biomet Holdings Inc. (ZBH - Free Report) . The company carries a Zacks Rank #4 (Sell).
Over the last three months, this leading musculoskeletal healthcare company was trading below the broader industry on macroeconomic uncertainties, pricing pressure and unfavorable currency fluctuations. The stock has gained 0.2% versus the broader industry’s 7% gain.
The company’s third-quarter results fell short of the Zacks Consensus Estimate and its own expectations. Per management, Zimmer Biomet is grappling with headwinds such as supply delay of certain products, leading to the inability of regaining lost customers in the United States and tapping new ones; the softened domestic market conditions; the impact of consecutive hurricanes and a significant price reduction in the Indian knee market. The trimmed 2017 guidance adds to our concerns indicating little chances of recovery ahead.
Estimate revision trend for 2017 also remains unfavorable with 17 estimates moving south and none in the opposite direction over the past month. The stock has seen the Zacks Consensus Estimate being revised 20 cents downward over this period to $8.04 per share.
On a positive note, we look forward to the expected synergies to be drawn from the recently completed LDR Holding acquisition, which should broaden and complement the company’s musculoskeletal offering. This is in line with its strategy to grow through inorganic means by focusing on mega buyouts. We are also impressed by the strong strategic and financial goals which the combined entity anticipates to reach, now that the deal has been closed.
Zimmer Biomet has been of late working to strengthen its foothold in the emerging markets that provide 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.
Key Picks
A few better-ranked medical stocks are PetMed Express, Inc. (PETS - Free Report) , Align Technology, Inc. (ALGN - Free Report) and Myriad Genetics, Inc. (MYGN - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
PetMed has a long-term expected earnings growth rate of 10%. The stock has rallied roughly 79.4% in a year.
Align Technologyhas a long-term expected earnings growth rate of 28.9%. The stock has gained 168.4% over a year.
Myriad Geneticshas a long-term expected earnings growth rate of 15%. The stock has surged 91.6% in a year.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>