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Zimmer Biomet (ZBH) to Report Q1 Earnings: What's in Store?
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Zimmer Biomet Holdings, Inc. (ZBH - Free Report) is expected to report first-quarter 2022 results on May 3, before market open.
In the last reported quarter, the company’s earnings of $1.95 missed the Zacks Consensus Estimate by 0.51%. Over the trailing four quarters, its earnings outperformed the consensus estimate on three occasions and missed once, the average beat being 4.86%. Let’s take a look at how things have shaped up prior to this announcement.
Factors at Play
Zimmer Biomet is expected to have witnessed a strong recovery in its legacy business in the first quarter, primarily driven by the mass opening up of the economy that led people to once again opt for non-COVID elective orthopedic and musculoskeletal procedures. However, the company might have struggled to maintain the recovery trend in the first half of Q1, thanks to severe-than-expected staffing shortages and supply issues leading to procedural deferrals following the emergence of a new variant of COVID-19. The industry trend so far shows the medical staffing shortage issue to have lingered through the first-quarter months.
Further, Zimmer Biomet, which has a broad business base in China, is expected to have come under pressure from the implementation of the volume-based procurement (VBP) program, which brought the prices of orthopedic devices down.
Despite the VBP-related issue, priority areas like the S.E.T. business (comprising Surgical, Sports Medicine, Foot and Ankle, Extremities and Trauma) are expected to have put up a better first-quarter performance compared with Q4, fueled by ramped-up investment in R&D and commercial infrastructure on overall improvement in COVID situation. We expect this arm to deliver strong results on the back of the company’s focus on sports and extremities, especially upper extremities, trauma and CMFT (Craniomaxillofacial Trauma). Zimmer Biomet is likely to have gained from its increasing presence in the field of Ambulatory Surgery Centers.
Over the past few quarters, the company’s Dental and Spine business has been witnessing growth deceleration, mainly due to unfavorable pricing. This business spin-off that took place in late February is expected to have a partial quarter favorable impact on the company’s overall business in Q1
We expect the company to have witnessed strength in its performances within its Hips and Knees product portfolio in the United States, which is better equipped for pandemic support compared to the non-U.S. markets of Zimmer Biomet. The nature of the business, which is non-elective, might have register year-over-year growth in Q1.
Zimmer Biomet Holdings, Inc. Price and EPS Surprise
Despite the recent surge in cases following the emergence of the Omicron and XE virus, the robust performance of Avenir Complete is likely to have continued during the first quarter, thus driving the Hip business. Also, strong demand for ROSA Knee, along with strong momentum for Persona Revision, is likely to have continued through the to-be-reported quarter. In this regard, the company earlier this year noted that one of the fastest growth subcategories of hip is the direct anterior approach. Both the recently-launched Avenir Complete and ROSA applications target that fast-growth submarket.
Q1 Estimates
The Zacks Consensus Estimate for first-quarter 2022 revenues is pegged at $1.59 billion, suggesting a 13.7% drop from the year-ago reported figure.
The Zacks Consensus Estimate for the company’s first-quarter 2022 earnings per share of $1.40 indicates an 18.1% decline from the year-ago adjusted earnings.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has a higher chance of beating estimates. This is exactly the case here as you can see:
Earnings ESP: Zimmer Biomet has an Earnings ESP of +0.36%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3.
We note that the Q1 estimates are showing a sharp year-over-year decline. However, because the Q1 projection itself has become conservative, there are higher chances that the company will beat estimates this quarter.
Other Stocks Worth a Look
Here are some other medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.
Lucira Health’s long-term earnings growth rate is estimated at 40.2%. LHDX’s current-year P/E of 3.73x trades significantly cheaper than the S&P 500 Index’s 19.36x.
NanoString Technologies, Inc. has an Earnings ESP of +1.53% and a Zacks Rank of 2.
NanoString Technologies’ 2023 earnings growth rate is estimated at 35.1%. NSTG’s revenue growth rate for 2023 is expected at 41.83%.
Meridian Bioscience has an Earnings ESP of +26.32% and a Zacks Rank of 2.
Meridian Bioscience’s long-term historical earnings growth rate is 16.3%. VIVO’s 2022 revenue growth rate is expected at 6.2%.
Image: Bigstock
Zimmer Biomet (ZBH) to Report Q1 Earnings: What's in Store?
Zimmer Biomet Holdings, Inc. (ZBH - Free Report) is expected to report first-quarter 2022 results on May 3, before market open.
In the last reported quarter, the company’s earnings of $1.95 missed the Zacks Consensus Estimate by 0.51%. Over the trailing four quarters, its earnings outperformed the consensus estimate on three occasions and missed once, the average beat being 4.86%. Let’s take a look at how things have shaped up prior to this announcement.
Factors at Play
Zimmer Biomet is expected to have witnessed a strong recovery in its legacy business in the first quarter, primarily driven by the mass opening up of the economy that led people to once again opt for non-COVID elective orthopedic and musculoskeletal procedures. However, the company might have struggled to maintain the recovery trend in the first half of Q1, thanks to severe-than-expected staffing shortages and supply issues leading to procedural deferrals following the emergence of a new variant of COVID-19. The industry trend so far shows the medical staffing shortage issue to have lingered through the first-quarter months.
Further, Zimmer Biomet, which has a broad business base in China, is expected to have come under pressure from the implementation of the volume-based procurement (VBP) program, which brought the prices of orthopedic devices down.
Despite the VBP-related issue, priority areas like the S.E.T. business (comprising Surgical, Sports Medicine, Foot and Ankle, Extremities and Trauma) are expected to have put up a better first-quarter performance compared with Q4, fueled by ramped-up investment in R&D and commercial infrastructure on overall improvement in COVID situation. We expect this arm to deliver strong results on the back of the company’s focus on sports and extremities, especially upper extremities, trauma and CMFT (Craniomaxillofacial Trauma). Zimmer Biomet is likely to have gained from its increasing presence in the field of Ambulatory Surgery Centers.
Over the past few quarters, the company’s Dental and Spine business has been witnessing growth deceleration, mainly due to unfavorable pricing. This business spin-off that took place in late February is expected to have a partial quarter favorable impact on the company’s overall business in Q1
We expect the company to have witnessed strength in its performances within its Hips and Knees product portfolio in the United States, which is better equipped for pandemic support compared to the non-U.S. markets of Zimmer Biomet. The nature of the business, which is non-elective, might have register year-over-year growth in Q1.
Zimmer Biomet Holdings, Inc. Price and EPS Surprise
Zimmer Biomet Holdings, Inc. price-eps-surprise | Zimmer Biomet Holdings, Inc. Quote
Despite the recent surge in cases following the emergence of the Omicron and XE virus, the robust performance of Avenir Complete is likely to have continued during the first quarter, thus driving the Hip business. Also, strong demand for ROSA Knee, along with strong momentum for Persona Revision, is likely to have continued through the to-be-reported quarter. In this regard, the company earlier this year noted that one of the fastest growth subcategories of hip is the direct anterior approach. Both the recently-launched Avenir Complete and ROSA applications target that fast-growth submarket.
Q1 Estimates
The Zacks Consensus Estimate for first-quarter 2022 revenues is pegged at $1.59 billion, suggesting a 13.7% drop from the year-ago reported figure.
The Zacks Consensus Estimate for the company’s first-quarter 2022 earnings per share of $1.40 indicates an 18.1% decline from the year-ago adjusted earnings.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has a higher chance of beating estimates. This is exactly the case here as you can see:
Earnings ESP: Zimmer Biomet has an Earnings ESP of +0.36%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3.
We note that the Q1 estimates are showing a sharp year-over-year decline. However, because the Q1 projection itself has become conservative, there are higher chances that the company will beat estimates this quarter.
Other Stocks Worth a Look
Here are some other medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.
Lucira Health has an Earnings ESP of +485.72% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Lucira Health’s long-term earnings growth rate is estimated at 40.2%. LHDX’s current-year P/E of 3.73x trades significantly cheaper than the S&P 500 Index’s 19.36x.
NanoString Technologies, Inc. has an Earnings ESP of +1.53% and a Zacks Rank of 2.
NanoString Technologies’ 2023 earnings growth rate is estimated at 35.1%. NSTG’s revenue growth rate for 2023 is expected at 41.83%.
Meridian Bioscience has an Earnings ESP of +26.32% and a Zacks Rank of 2.
Meridian Bioscience’s long-term historical earnings growth rate is 16.3%. VIVO’s 2022 revenue growth rate is expected at 6.2%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.