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Will Zimmer Biomet (ZBH) Beat Estimates This Earnings Season?
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Zimmer Biomet Holdings, Inc. (ZBH - Free Report) is scheduled to report second-quarter 2023 results on Aug 1, before market open.
In the last reported quarter, the company’s earnings of $1.89 exceeded the Zacks Consensus Estimate by 13.86%. Over the trailing four quarters, its earnings outperformed the consensus estimate on each occasion, the average beat being 7.38%. Let’s take a look at how things have shaped up prior to this announcement.
Factors at Play
During the last reported first quarter, Zimmer Biomet talked about three major headwinds leading to revenue disruption. These were high level of supply pressure, staffing issues and COVID-related challenges. However, the company also assumed these headwinds to ease out as the year progressed, leading to better recovery in terms of elective procedures. This is likely to be reflected in the second-quarter results of the company.
However, the company might have still faced upheaval in overall business, thanks to the global inflationary situation. Rising labor and raw material costs and FX headwinds might have impacted ZBH’s bottom line in the second quarter.
Further, the implementation of the volume-based procurement program brought down China’s orthopedic device prices, which might have otherwise impacted ZBH’s business in this region in the to-be-reported quarter.
Zimmer Biomet Holdings, Inc. Price and EPS Surprise
Overall, Zimmer Biomet is expected to have particularly witnessed procedure recovery in its legacy business in the second quarter. Strong strategic execution and a solid momentum with innovations are expected to have driven second-quarter revenues within the Knee and Hip businesses.
We expect the company to have witnessed strength in its performances within its Hips and Knees product portfolio in the United States.
The company is expected to have witnessed strong performance across G7 Revision System and Avenir Complete primary hip, which is focused on the direct anterior surgical approach. These along with the continued solid Rosa pull-through in the hip category, especially in the United States, too should significantly contribute to the top line within the Hip category.
Going by our model, the Hip business of Zimmer Biomet is projected to grow 6.6% in Q2 on a year-over-year basis.
Within Knees, apart from a strong recovery in elective procedures, easy comparisons outside the United States, strong knee procedure recovery across most regions, continued global traction in the Persona knee system and continued increase in Rosa procedure penetration and pull-through are expected to have contributed to the company’s Knees business. The company is expected to have also gained from the recent launch of the Persona OsseoTi Keel Tibia for Cementless Knee Replacement.
Per our model estimates, the Knee business is expected to grow 1% in Q2 on a year-over-year basis.
Meanwhile, in the first quarter, priority areas like the S.E.T. business (comprising Surgical, Sports Medicine, Foot and Ankle, Extremities and Trauma) reported strong performance across key focus areas of CMFT, sports medicine, and upper extremities. This might have been once again repeated in the second quarter. Zimmer Biomet is also likely to have gained from the launch of the Identity shoulder system in the United States.
S.E.T. might have been impacted by a comp tailwind from China VBP that was partially offset by reimbursement changes in restorative therapies.
For this business, our model shows a year-over-year expected revenue decline of 3.6% for Q2.
Q2 Estimates
The Zacks Consensus Estimate for second-quarter 2023 revenues is pegged at $1.83 billion, suggesting a 2.5% rise from the year-ago reported figure.
The Zacks Consensus Estimate for the company’s second-quarter 2023 earnings per share of $1.82 indicates no change from the year-ago adjusted earnings.
What Our Model Suggests
Per our proven model, a stock with a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a higher chance of beating estimates. This is exactly the case, as you can see below.
Earnings ESP: Zimmer Biomet has an Earnings ESP of +2.34%. 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 #2.
Other Stocks to Consider
Here are some other medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.
TG Therapeutics has an expected earnings growth rate of 37.7% for 2023. TGTX’s 2023 projected revenues of $87.65 million indicate a massive increase from the year-ago reported figure of $2.8 million.
Dentsply Sirona (XRAY - Free Report) has an Earnings ESP of +3.39% and a Zacks Rank of #2. Dentsply Sirona is scheduled to release second-quarter fiscal 2023 results on Aug 3.
XRAY’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other, the average beat being 10.47%. XRAY’s long-term expected growth rate is estimated to be 9.3%.
SiBone (SIBN - Free Report) has an Earnings ESP of +12.20% and a Zacks Rank #1. SiBone is scheduled to release second-quarter 2023 results on Aug 7.
SIBN’s earnings surpassed estimates in three of the trailing four quarters and missed the same once, with the average surprise being 11.11%. The Zacks Consensus Estimate for SIBN’s second-quarter EPS indicates a 22.2% improvement from the year-ago reported figure.
Image: Bigstock
Will Zimmer Biomet (ZBH) Beat Estimates This Earnings Season?
Zimmer Biomet Holdings, Inc. (ZBH - Free Report) is scheduled to report second-quarter 2023 results on Aug 1, before market open.
In the last reported quarter, the company’s earnings of $1.89 exceeded the Zacks Consensus Estimate by 13.86%. Over the trailing four quarters, its earnings outperformed the consensus estimate on each occasion, the average beat being 7.38%. Let’s take a look at how things have shaped up prior to this announcement.
Factors at Play
During the last reported first quarter, Zimmer Biomet talked about three major headwinds leading to revenue disruption. These were high level of supply pressure, staffing issues and COVID-related challenges. However, the company also assumed these headwinds to ease out as the year progressed, leading to better recovery in terms of elective procedures. This is likely to be reflected in the second-quarter results of the company.
However, the company might have still faced upheaval in overall business, thanks to the global inflationary situation. Rising labor and raw material costs and FX headwinds might have impacted ZBH’s bottom line in the second quarter.
Further, the implementation of the volume-based procurement program brought down China’s orthopedic device prices, which might have otherwise impacted ZBH’s business in this region in the to-be-reported quarter.
Zimmer Biomet Holdings, Inc. Price and EPS Surprise
Zimmer Biomet Holdings, Inc. price-eps-surprise | Zimmer Biomet Holdings, Inc. Quote
Overall, Zimmer Biomet is expected to have particularly witnessed procedure recovery in its legacy business in the second quarter. Strong strategic execution and a solid momentum with innovations are expected to have driven second-quarter revenues within the Knee and Hip businesses.
We expect the company to have witnessed strength in its performances within its Hips and Knees product portfolio in the United States.
The company is expected to have witnessed strong performance across G7 Revision System and Avenir Complete primary hip, which is focused on the direct anterior surgical approach. These along with the continued solid Rosa pull-through in the hip category, especially in the United States, too should significantly contribute to the top line within the Hip category.
Going by our model, the Hip business of Zimmer Biomet is projected to grow 6.6% in Q2 on a year-over-year basis.
Within Knees, apart from a strong recovery in elective procedures, easy comparisons outside the United States, strong knee procedure recovery across most regions, continued global traction in the Persona knee system and continued increase in Rosa procedure penetration and pull-through are expected to have contributed to the company’s Knees business. The company is expected to have also gained from the recent launch of the Persona OsseoTi Keel Tibia for Cementless Knee Replacement.
Per our model estimates, the Knee business is expected to grow 1% in Q2 on a year-over-year basis.
Meanwhile, in the first quarter, priority areas like the S.E.T. business (comprising Surgical, Sports Medicine, Foot and Ankle, Extremities and Trauma) reported strong performance across key focus areas of CMFT, sports medicine, and upper extremities. This might have been once again repeated in the second quarter. Zimmer Biomet is also likely to have gained from the launch of the Identity shoulder system in the United States.
S.E.T. might have been impacted by a comp tailwind from China VBP that was partially offset by reimbursement changes in restorative therapies.
For this business, our model shows a year-over-year expected revenue decline of 3.6% for Q2.
Q2 Estimates
The Zacks Consensus Estimate for second-quarter 2023 revenues is pegged at $1.83 billion, suggesting a 2.5% rise from the year-ago reported figure.
The Zacks Consensus Estimate for the company’s second-quarter 2023 earnings per share of $1.82 indicates no change from the year-ago adjusted earnings.
What Our Model Suggests
Per our proven model, a stock with a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a higher chance of beating estimates. This is exactly the case, as you can see below.
Earnings ESP: Zimmer Biomet has an Earnings ESP of +2.34%. 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 #2.
Other Stocks to Consider
Here are some other medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.
TG Therapeutics (TGTX - Free Report) has an Earnings ESP of +12.00% and a Zacks Rank of #2. The company is expected to release second-quarter 2023 results soon. You can see the complete list of today’s Zacks #1 Rank stocks here.
TG Therapeutics has an expected earnings growth rate of 37.7% for 2023. TGTX’s 2023 projected revenues of $87.65 million indicate a massive increase from the year-ago reported figure of $2.8 million.
Dentsply Sirona (XRAY - Free Report) has an Earnings ESP of +3.39% and a Zacks Rank of #2. Dentsply Sirona is scheduled to release second-quarter fiscal 2023 results on Aug 3.
XRAY’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other, the average beat being 10.47%. XRAY’s long-term expected growth rate is estimated to be 9.3%.
SiBone (SIBN - Free Report) has an Earnings ESP of +12.20% and a Zacks Rank #1. SiBone is scheduled to release second-quarter 2023 results on Aug 7.
SIBN’s earnings surpassed estimates in three of the trailing four quarters and missed the same once, with the average surprise being 11.11%. The Zacks Consensus Estimate for SIBN’s second-quarter EPS indicates a 22.2% improvement from the year-ago reported figure.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.