5 Largest Orthopedic Companies in the World

In this article, we will take a look at the 5 largest orthopedic companies in the world. If you want to see more companies in this selection, go to the 15 Largest Orthopedic Companies in the World.

5. Medtronic plc (NYSE:MDT)

2021 Orthopedic Revenue: $3.5 billion

Medtronic plc (NYSE:MDT) is a Minneapolis, Minnesota-based medical device company with a strong presence in the spinal and orthopedic segment.

The orthopedic and spine segment of the business has observed above-market growth rates for the last several years, increasing Medtronic plc’s (NYSE:MDT) market share in the industry. Analysts believe that Medtronic plc (NYSE:MDT) could spin off the division and separate it from weaker-performing segments to unlock its true value. The company has been considered a market leader in the industry since the launch of its first spine surgical robot nearly a decade ago. Medtronic plc (NYSE:MDT) has made acquisitions on the way to fasten the technological advancement in the robotic spine surgery segment.

Artisan Partners shared its outlook on Medtronic plc (NYSE:MDT) in its Q2 2022 investor letter. Here’s what the firm said:

“While Medtronic plc (NYSE:MDT)’s procedure volumes recovered to pre-COVID levels, foreign exchange headwinds overshadowed underlying business value growth, and supply chain issues, including those related to China’s lockdowns, impacted the surgical innovations business. The downdraft in the market during the quarter led to a pile-on. We are being patient with our investment in Medtronic because the company continues to be a strong free cash flow generator and is attractively priced, with a FCF yield of 5% on trailing one-year numbers and a dividend yield of 3%. Medtronic is under new management that is focused on growing the company’s top line, reinvesting in R&D, returning cash to shareholders and growing operating profits. We like new management’s strategy and believe new product launches, increased surgery visits, sound M&A transactions and a shareholder returns focus, should reinvigorate the business. We added to our positions in these health care names during the quarter.”

4. Smith & Nephew plc (NYSE:SNN)

2021 Orthopedic Revenue: $4 billion

Smith & Nephew plc (NYSE:SNN) is a United Kingdom-based medical technology company with operations in over 100 countries and a history of 160 years. The company is a leading authority in the field of joint replacement systems for hips, knees, and shoulders.

On January 9, Veronika Dubajova at Citi initiated coverage on Smith & Nephew plc (NYSE:SNN) stock with a Buy rating and a target price of $31.03. The target price reflects a potential upside of 8.4% from the closing price on January 12. Dubajova anticipates an improvement in the company’s surgical procedure volumes that could aid Smith & Nephew plc (NYSE:SNN) in delivering above-average revenue and earnings growth in 2023. The analyst prefers companies that can withstand macroeconomic uncertainties.

Here’s what Palm Valley Capital Management said about Smith & Nephew plc (NYSE:SNN) in its Q3 2022 investor letter:

“We bought Smith & Nephew plc (NYSE:SNN) toward the end of the quarter. Smith & Nephew is a Londonbased medical device company that specializes in knee and hip replacements, sports medicine, and wound management. We purchased the ADR, which has declined meaningfully (-31% year-to-date) along with the British pound. While Smith & Nephew’s stock is priced in pounds, its revenues are in other major currencies, such as the dollar, euro, and yen. In 2021, 51% of its revenues were generated in the United States, while 31% were in other developed markets. We believe Smith & Nephew is a high-quality business that generates above average profit margins and abundant free cash flow. We were pleased the turmoil in the British pound provided us with the opportunity to purchase its shares at a discount to our calculated valuation.”

3. Zimmer Biomet Holdings, Inc. (NYSE:ZBH)

2021 Orthopedic Revenue: $7.5 billion

Zimmer Biomet Holdings, Inc. (NYSE:ZBH) is a Warsaw, Indiana-based provider of musculoskeletal products and solutions with a rich history of more than 90 years. The company has operations in more than 25 countries and offers its products and services in more than 100 countries.

Shagun Singh at RBC Capital upgraded Zimmer Biomet Holdings, Inc. (NYSE:ZBH) stock from a Sector Perform to an Outperform rating and increased the target price from $125 to $141 on January 9. The analyst supports companies that offer procedures that cannot be deferred for long. Singh thinks Zimmer Biomet Holdings, Inc. (NYSE:ZBH) is one of the organizations experiencing new product cycles and has the potential to gain a higher market share in the near future.

Citadel Investment Group increased its stake in Zimmer Biomet Holdings, Inc. (NYSE:ZBH) by over 5000% during Q3 2022.

2. DePuy Synthes Companies

2021 Orthopedic Revenue: $8.5 billion

DePuy Synthes Companies is an orthopedic and neurosurgery company that is a part of New Brunswick, New Jersey-based consumer goods, pharmaceutical, and medical devices giant Johnson & Johnson Inc (NYSE:JNJ).

The company has recently launched the INHANCE Shoulder System as an innovation in shoulder replacement technology. The portfolio of DePuy Synthes is considered one of the most diverse in the field of orthopedics as it covers a broad range of segments ranging from joint reconstruction, spinal surgery, trauma, and sports medicine. In October 2022, DePuy Synthes Companies received 510(k) approval from the US FDA for its TELIGEN system, which provides digitalization tools for visualization.

1. Stryker Corporation (NYSE:SYK)

2021 Orthopedic Revenue: $8.9 billion

Stryker Corporation (NYSE:SYK) is a Kalamazoo, Michigan-based medical technology company leading the orthopedics field. The company was founded by Dr. Homer Stryker, an orthopedic surgeon, in 1941.

In a note issued to investors on January 9, Shagun Singh at RBC Capital upgraded Stryker Corporation’s (NYSE:SYK) stock from a Sector Perform to an Outperform rating and increased the target price from $240 to $284. The management has shared the initial outlook for FY23 at various investor conferences. Stryker Corporation (NYSE:SYK) is expected to see improvement in leverage but could face headwinds during Q1 2023 due to supply chain-related challenges.

Here’s what Diamond Hill Capital said about Stryker Corporation (NYSE:SYK) in its Q3 2022 investor letter:

“Stryker Corporation (NYSE:SYK) was the only new addition to the portfolio in Q3. It is one of the largest medical device manufacturers with a track record of consistently outgrowing its end markets and competitors. Stryker has a highly performance driven culture with a decentralized operating model that results in strong incentive alignment within the company. We believe the management team has executed well, making small but meaningful decisions that have positioned the firm well among competitors. Management operates with a market share gain mentality and strives to be a category leader in the market they are in. Stryker also benefits from its broad portfolio of surgical tools, small and large cap hospital equipment, waste management products, etc., which enables it to address all the needs of a hospital operating room and be a one-stop shop for health care facilities. This is particularly appealing to hospitals, and it positions Stryker to be the supplier of all operating room equipment versus a single product, thus enabling the company to gain market share.”

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