A new report from NASDAQ predicts Zimmer's stock will rise in the near future.
Zimmer's stock has underperformed this year despite acquiring Biomet compared with other competitors, and investors are still hoping to "reap the rewards" from the transaction. However, according to NASDAQ, the future is bright for Zimmer investors for several reasons, including:
1. Zimmer is poised to take its place among the top two players in the orthopedic device market — second only to Johnson & Johnson since acquiring Biomet.
2. Next year, Zimmer expects to see $1.25 earnings per share from the Biomet acquisition, and the long-term projection is greater, according to the report.
3. The company predicts $270 million cost savings over the next three years.
4. The Affordable Care Act's medical device tax placed a huge burden on the company for the past year, but Zimmer expects the burden to decrease. Then the company can invest in new technology and capture market share.
5. Biomet's product portfolio enhances Zimmer's presence in growing markets such as orthopedic trauma and sports medicine.
6. The company is ahead of the consolidation game; as more companies consolidate, Zimmer will be in a good position to negotiate the best prices with hospitals who are looking to lower implant spend.
7. Zimmer can offer product bundles for better pricing which could give them an advantage in the United States market share.
8. Developing countries have great opportunities in orthopedics. Zimmer acquired China's Beijing Montagne Medical Device Co., in 2010 and is competing with other global device companies in the international market.