Zimmer Biomet (ZBH) fell on Thursday after the medtech company said the implementation of a new business system would reduce revenue by 1% in 2024.
↑
X
How to Buy Stocks: Bases and Buy Points
The Warsaw, Ind.-based company, which sells hip and knee replacements, plans to implement an ERP system, which will hit its annual revenue and profit, Evercore ISI analyst Vijay Kumar said in a report.
“While it is expected to gradually improve over the year, more than half of the impact is in the third quarter,” Kumar said. “Moreover, it will impact earnings per share (which the company wants to limit) and geographically it will primarily impact the US and Canada.”
Zimmer Biomet shares fell 8.7% to close at 104.47. The medtech stock is now trading below the lower end of a consolidation with a buy point at 133.90, according to IBD MarketSurge charts.
Zimmer Biomet: Lowers Profit Estimates
Analysts are currently forecasting adjusted earnings of $8.05 to $8.06 per share, according to Kumar of FactSet and Evercore. The Street estimates $7.73 billion in sales.
Zimmer Biomet expects most of these issues to be resolved by the end of the year.
“This is not a production issue, but rather a slower sales velocity due to the (resource planning) issue,” Kumar said.
He maintained his “in-line” rating and price target of 113 for Zimmer Biomet, but said earnings could fall 10 cents per share in 2025 from his previous estimate of $8.65.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
YOU MAY ALSO LIKE:
Abbott introduces first-ever glucose meter for non-diabetics
How Lilly and Novo Can Beat Tesla in the Battle for the Trillion-Dollar Club; Plus Nvidia’s Battle with Microsoft and Apple
IBD Stocks of the Day: Discover How to Find, Follow, and Buy the Best Stocks
Find Today’s Best Growth Stocks to Watch with IBD 50
Profit from short-term trends with SwingTrader
