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What’s Behind the Recent Slump in ZBH Stock Price?

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ZBH’s stock performance

Zimmer Biomet Holdings (ZBH) closed trading at a price of $113.1 on August 30, 2017. The stock has a 50-day moving average of $119.95 and a 200-day moving average of $120.95.

ZBH stock was trading at its 52-week low of $95.63 on November 14, 2016, and its 52-week high of $133.49 on July 17, 2017. As of August 30, 2017, ZBH stock closed trading ~18.3% above its 52-week low and ~15.3% below its 52-week high.

Since its 2Q17 earnings release on July 27, ZBH stock has fallen ~12%. ZBH posted disappointing sales for 2Q17 and lower-than-expected earnings results. The company also lowered its fiscal 2017 guidance. ZBH stock lost ~2.5% on July 27.

On August 9, 2017, Zimmer Biomet Holdings lost ~2% due to the news of a subpoena received by the company from the US Health & Human Services Department.

As of June 30, 2017, peers Medtronic (MDT), Boston Scientific (BSX), and Abbott Laboratories (ABT) have generated returns of about -8.2%, 13%, and 16.7%, respectively, over the last 12 months.

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Comparisons with industry and market performances

Over the past 12 months, Zimmer Biomet Holdings has witnessed a stock price decline of ~12.7%. The stock has been a disappointment for investors as it has largely underperformed the market as represented by the SPDR S&P 500 Index (SPY). SPY has returned ~13.2% in the past 12 months.

The performance of the ZBH stock can also be compared to the iShares US Medical Devices ETF (IHI), which has returned ~14.3% over the past 12 months. On a YTD (year-to-date) basis, ZBH stock has risen 9.5%, compared with returns of ~10% and ~23% for SPY and IHI, respectively.

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