UBS’ Bottom Quant Stocks In AI, IT, Healthcare & Others: 29 Stocks In All Sectors

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

Number of Hedge Fund Investors In Q2 2024: 41

Sector: Healthcare

Zimmer Biomet Holdings, Inc. (NYSE:ZBH) is a specialty medical devices company. The firm makes and sells products that are used to support or augment the human body’s structure. These include products used after surgery, in hips and knees, and in facial reconstruction. It is one of the more interesting stocks to watch, as despite the fact that an aging American population carries the potential of high and sustained demand for some of its products such as hip and knee replacements, Zimmer Biomet Holdings, Inc. (NYSE:ZBH)’s shares are down by 10.46% year to date. This drop has come on the back of software issues that have impacted the firm’s sales and forced it to cut its 2024 annual EPS guidance. A resolution to these problems and adequate product shipping could create tailwinds for Zimmer Biomet Holdings, Inc. (NYSE:ZBH)’s stock.

Zimmer Biomet Holdings, Inc. (NYSE:ZBH)’s management commented on the disruption during the Q3 2024 earnings call. Here is what they said:

“So just on the first part of your question on the guidance for 2024, look, listen, we’re going to be somewhat conservative when it comes to the year and allow us to be conservative given the PTSD, if you will, or the recent ERP channels. In Q4, all kinds of things happen. We want to see where we end up with pricing. Pricing has been positive for the entire year. Let’s see where we end up in Q4 with all the puts and takes that, that happened around rebates, et cetera, et cetera. I want to make sure that we see the commercial execution that we need to see around new product introductions. We’ve got three very meaningful new product introductions as we speak. We’re late to get some of the sets out given the challenges with ERP.

So again, I want to get at least a solid more on than I had before I get to positive on Q4. And then look, there are some macro factors early in the quarter. We saw some disruption with the hurricane and whatnot and the IV bags. We believe those are going to come in within the quarter. As a matter of fact, we are seeing those cases coming back already in the quarter. So allow us to be somewhat conservative, and we’ll see what we end up in Q4. Relative to 2025, we’re very positive. The ERP constraint or challenge is well contained within the year. We’ll update you in early 2025 when it comes to what 2025 is going to look like. But I would say today, we’re feeling very positive, given new product introductions, the resolution of the ERP, et cetera, et cetera.”