QUOTE AND NEWS
Benzinga  Jul 28  Comment 
Oppenheimer upgraded Zimmer Holdings (NYSE: ZMH) from Market Perform to Outperform. The target price for Zimmer Holdings has been raised from $107.00 to $118.00. Zimmer Holdings shares have surged 20.56% over the past 52 weeks, while the S&P...
Benzinga  Jul 28  Comment 
SeekingAlpha  Jul 24  Comment 
Zimmer Holdings (NYSE:ZMH) Q2 2014 Earnings Call July 24, 2014 8:00 am ET Executives Robert J. Marshall - Vice President of Investor Relations and Treasurer David C. Dvorak - Chief Executive Officer, President and Director James T....
newratings.com  Jul 24  Comment 
WASHINGTON (dpa-AFX) - Zimmer Holdings, Inc. (ZMH), a manufacturer of orthopedic reconstructive, spinal and trauma devices, Thursday said second-quarter net earnings of the company increased to $176.5 million from $152.1 million in the previous...
Benzinga  Jul 14  Comment 
In a report published Monday, Morgan Stanley analyst David R. Lewis reiterated an Equal-Weight rating on Zimmer (NYSE: ZMH). In the report, Morgan Stanley noted, “We see three underappreciated drivers of additional deal accretion. While we...
Benzinga  Jul 3  Comment 
In a report published Thursday, Summer Street Research Partners analyst Mark Landy reiterated a Buy rating and $133.00 price target on Zimmer (NYSE: ZMH). In the report, Summer Street Research Partners noted, “Zimmer and Biomet just announced...
Market Intelligence Center  Jul 1  Comment 
After Monday’s trading in Zimmer Holdings Inc. (ZMH) the algorithms behind MarketIntelligenceCenter.com's Artifical Intelligence Center picked out a trade that offers a 7.73% or 34.82% (for comparison purposes only), while providing 1.68%...
Benzinga  May 15  Comment 
Analysts at Bank of America upgraded L-3 Communications Holdings (NYSE: LLL) from “underperform” to “buy.” The target price for L-3 Communications has been raised from $117 to $146. L-3 Communications' shares closed at $117.35 yesterday....
TheStreet.com  May 14  Comment 
Story updated at 9:45 a.m. to reflect market activity. NEW YORK (TheStreet) -- Zimmer Holdings was upgraded to "strong buy" from "hold" by Needham Wednesday. Zimmer gained 0.1% to $101.38 in morning trading. Needham analysts said Zimmer's...
Market Intelligence Center  May 7  Comment 
Option-trade picking algorithms patented by MarketIntelligenceCenter.com found a trading opportunity with Zimmer Holdings Inc. (ZMH) that should provide a 7.52% return in just 136 days. Sell one Sep. '14 call at the $105.00 level for each 100...
Market Intelligence Center  May 5  Comment 
The patented option trade-picking algorithms behind MarketIntelligenceCenter.com's Artificial Intelligence Center have selected a covered call trade on Zimmer Holdings Inc. (ZMH) that includes 3.47% downside protection. Sell one contract of the...




 

Zimmer(NYSE:ZMH) is a leading orthopedic medical devices company with the top worldwide market share in both hip and knee implants. ZMH also competes in the spine, dental and trauma areas in the orthopedic industry. The company was spun off from Bristol-Myers Squibb Company (BMY) in 2001 and has grown significantly through organic growth and through acquisitions such as Centerpulse (2003), the leading European orthopedics company and Implex Corp (2004), a NJ based orthopaedics company.

Zimmer's primary customers include orthopaedic surgeons, neurosurgeons, oral surgeons, dentists, hospitals, stocking distributors, healthcare dealers and, in their capacity as agents, healthcare purchasing organizations or buying groups. These customers vary greatly in size, and may range from large multinational enterprises to independent surgeons.

Underpinning Zimmer, and other orthopedic implant manufacturers, is a market that is supported by favorable demographic trends for orthopedic treatments. Furthermore, the increase in Obesity and related health issues continue to drive demand for orthopedic implant related surgeries. Zimmer primarily competes with Stryker (SYK), JOHNSON & JOHNSON (JNJ)’s DePuy subsidiary, Smith & Nephew SNATS (SNN) , and Biomet (BMET).

Business Overview

Zimmer's products include joint and dental reconstructive orthopaedic implants, spinal implants, trauma products, and related orthopaedic surgical products.

Zimmer operates in more than 25 countries and markets products in more than 100 countries. Its corporate headquarters are in Warsaw, Indiana, and it has over 100 manufacturing, distribution and warehousing and/or office facilities worldwide. The company breaks its operations into three major geographic segments — the Americas, which is comprised principally of the United States and includes other North, Central and South American markets; Europe, which is comprised principally of Europe and includes the Middle East and Africa; and Asia Pacific, which is comprised primarily of Japan and Australia and includes other Asian and Pacific markets.[1]

Business Segments

Zimmer breaks its operations into three geographic regions: i) Americas, ii) Europe, and iii) Asia Pacific.

Americas (58% of total 2009 Revenues)

The Americas is Zimmer's largest segment, accounting for $2.372 billion of the company's 2009 net sales.[1] Within the Americas segment, the United States accounted for 94% of net sales in this region.

Europe (27%)

The European geographic segment accounted for $1.12 billion of 2009 net sales.[2] France, Germany, Italy, Spain, Switzerland and the United Kingdom combined represented over 75% of net sales in the region. This segment also includes other key markets, including Benelux, Nordic, Central and Eastern Europe, the Middle East and Africa.

Asia Pacific (15%)

The Asia Pacific geographic segment accounted for $603.8 million of 2009 net sales, with Japan being the largest market within this segment.[2] This segment also includes key markets such as Australia, New Zealand, Korea, China, Taiwan, India, Thailand, Singapore, Hong Kong and Malaysia.

Key Trends and Forces

Medicare coverage patterns

Health coverage is an important determining factor when patients and doctors choose among various treatment options. Medicare coverage is particularly significant in that it directly affects over forty million Americans, how much patients have to pay for Zimmer products, and how much Zimmer will receive in payments from Medicare. Currently, Medicare and other third party payors are emphasizing more cost-effective products and therapies, by limiting the reimbursement they will cover. Furthermore, even if a new ZMH implant or product is cleared by the FDA, Zimmer faces limited demand until Medicare and other payors approve it for reimbursement. Both of these factors can affect Zimmer's sales.

Government Regulation

Zimmer and its competitors are all heavily affected by government regulation, especially by the FDA, which is responsible for regulating food, dietary supplements, drugs, medical devices, and other products in the United States. Without FDA approval, Zimmer cannot sell any of its implants or most other products to the public. If any of Zimmer's devices fail FDA approval, it can adversely affect the company's sales.

Aging Demographic

The percentage of the US, European, Japanese and other regions population over age 65 is expected to nearly double by the year 2030. Zimmer and other orthopedic companies are benefiting from this aging demographic since knee and hip joints tend to wear out and need replacement with age. Also, older patients tend to have higher discretionary incomes and can afford expensive implant surgeries. This could drive sales for ZMH.

Obesity

In 2010, more than a third of American adults were obese, and this trend seems likely to continue. The hip and knee implant markets are in particular affected by the prevalence of obesity -- increased weight puts significantly more pressure on joints than they are designed for, making them wear out faster. This drives up demand for joint replacements and could benefit ZMH's sales.

Competition

Zimmer faces competition from firms such as:

  • JOHNSON & JOHNSON (JNJ) - the world's 2nd largest and most broadly based manufacturer of health care products, with a significant share of the consumer, pharmaceutical, medical treatment and diagnostic device markets.[3]
  • Stryker (SYK) - leading medical technology company with operations in Orthopaedic Implants and Medical/Surgical Products.
  • Smith & Nephew SNATS (SNN) - British-based medical devices company with Orthopaedics division headquarters in Memphis, TN., with specialty in hip and knee implants and orthopaedic trauma products.
  • Biomet (BMET) - medical device manufacturer based in Warsaw, IN, specializes in reconstructive products for hips, knees and shoulders, fixation devices, orthopedic support devices, dental implants and operating room supplies.

References

  1. 1.0 1.1 ZMH 10-K 2009 Item 1 Pg. 3
  2. 2.0 2.1 ZMH 10-K 2009 Item 1 Pg. 4
  3. JNJ 2006 10k
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