FDA Approves Zimmer Biomet’s ROSA, Stock Up 2.6%

Today, Zimmer Biomet Holdings’ (ZBH) ROSA Knee System received FDA 510(k) clearance for robotically assisted total knee replacement surgeries. ROSA is a robotics-assisted surgical system specifically designed to improve total knee replacement surgeries. This robotics system delivers continuous data analysis and assists in the control and movement of surgical instruments to increase precision during procedures.

Today, Zimmer Biomet Holding is trading at ~$108.04, ~2.67% higher than yesterday’s closing price of $105.24 and an ~11% premium over its 52-week low of $96.99 on December 24, 2018. The company hit a 52-week high of $134.55 on September 21, 2018.

Of the 32 analysts tracking Zimmer Biomet in January 2019, eight recommend a “strong buy,” nine recommend a “buy,” 12 recommend a “hold,” two analysts recommend a “sell,” and one recommends a “strong sell.” The consensus 12-month target price was $128.39, which is an ~18.74% return on investment over the next 12 months.

In the first nine months of 2018, Zimmer Biomet Holdings’ net sales grew ~2% YoY (year-over-year) to reach $5.9 billion from $5.7 billion. Wall Street analysts estimate that the company’s net revenues in fiscal 2018 to be around $7.9 billion. Analysts expect ZBH’s peers in the medical equipment market, Stryker Corp (SYK) and Boston Scientific (BSX), to report revenues of $13.5 billion and $9.8 billion, respectively, in fiscal 2018, reflecting ~8.8%  and ~8.5% YoY growth.

In the first nine months of 2018, Zimmer Biomet reported net income and diluted EPS of $521.9 million and $2.55, respectively, compared to $582.4 million and $2.86 in the same period the prior year. Analysts expect ZBH to report net income of around $922.0 million in fiscal 2018.