Zimmer Biomet: Adding To The Growth Profile

(8min)

Summary

  • Zimmer Biomet shares at $105 reveal value at 13 times adjusted earnings, as the company continues to grow despite a GLP-1 drug overhang.
  • The 2015 Zimmer Biomet merger hasn't been fully delivered, but recent organic growth and M&A actions are promising, with mid-single digit sales growth projected.
  • The $1.2 billion Paragon 28 acquisition enhances foot and ankle orthopedics, despite short-term EPS dilution, and boosts Zimmer Biomet's growth profile.
  • I remain optimistic on Zimmer Biomet due to continued organic growth, strategic acquisitions, and product approvals, supporting future valuation multiple inflation.
  • Looking for a helping hand in the market? Members of Value In Corporate Events get exclusive ideas and guidance to navigate any climate. Learn More »

Zimmer Biomet headquarters. Zimmer Biomet produces artificial bone joints and dental prostheses.

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When shares of Zimmer Biomet (NYSE:ZBH) moved down to the $105 mark in September, I believed that real value was showing up. Shares sold off despite the projection of mid-single digit sales growth, improved cash flows and higher earnings growth, driven by recent M&A

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This article was written by

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The Value Investor has a Master of Science with specialization in financial markets and a decade of experience tracking companies via catalytic company events.

As the leader of the investing group Value In Corporate Events they provide members with opportunities to capitalize on IPOs, mergers & acquisitions, earnings reports and changes in corporate capital allocation. Coverage includes 10 major events a month with an eye towards finding the best opportunities. Learn more.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of ZBH either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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