Hospitals Reopening, But Zimmer Biomet Needs To Stabilize Its Knee Business

I wasn’t overly fond of Zimmer Biomet (ZBH) back in early January, and the shares have modestly underperformed peers like Smith & Nephew (SNN) and Stryker (SYK) since then. The Covid-19 outbreak has certainly created an unexpected disruption for a business based largely around elective procedures, but I remain concerned about Zimmer on the more fundamental level of whether it can stop losing share to knee and hip competitors like Stryker and Johnson & Johnson (JNJ), and whether restructuring efforts can really improve the company’s long-term margin and growth outlook.

At the right price, I think the “better Zimmer” story might have legs, but today’s price looks more “okay” than compelling to me right now.

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Hospitals Reopening, But Zimmer Biomet Needs To Stabilize Its Knee Business