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Zimmer Biomet Holdings, Inc. Message Board

  • wpcqe wpcqe Oct 11, 2005 12:54 PM Flag

    Morningstar

    Perhaps many of you don't hold much faith in morningstars statistics but on 9/15 they raised the fair value from $77 to $79.

    "We've raised our fair value estimate to $79 per share from $77 to reflect the latest quarter's cash flow. We expect average annual sales growth of 13% over the next five years. The firm has already done a good job of bringing Centerpulse's lagging gross margins into the mid-70s range that Zimmer has historically maintained. We expect this improvement to stick as two key trends offset each other on product pricing. On the one hand, product mix shifts toward higher-margin minimally invasive implants and knee replacements and the firm's Trabecular Metal products should help eke out margin gains. On the other, pricing pressure from hard-bargaining customers and continued scrutiny from watchful legislators should keep a lid on strong price increases. We anticipate that selling, marketing, and administrative expenses should remain at 39%-40% of sales, leading to operating margins near 30%. If Zimmer manages to add another 100 basis points to its operating margin, this would result in a $3 boost to our fair value estimate."

    There are people on this board that are saying zmh has more down to go. Frankly, when you compare zmh valuations and ratios to its peers and the industry as a whole there just is not a lot of downside without it selling at a bug discount to its peers. I am waiting for the earnings report but unless its a disaster I think we will be back over $70 very fast.

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    • Agreed...this puppy has based out........Chart looks solid.............SOLID.

      • 1 Reply to doubly_do_ditto
      • << Agreed...this puppy has based out........Chart looks solid.............SOLID >>

        doubly, You gotta be kiddin me. ZMH has not yet even began to form a base. Thats one of the primary reasons I ( and probably others ) are so bearish on the near term of ZMH.

        "Chatr loooks solid". Again, you gotta bew kiddin me. IF you are, in fact, looking at a ZMH chart you better turn it around. You either have it upside down or you need new glasses. And if you get new glasses, ask for glasses that sre not rose colored

    • Get into Morning StarI life this information.It is hard to get.Thank you for your haep.And this post...

    • << There are people on this board that are saying zmh has more down to go. Frankly, when you compare zmh valuations and ratios to its peers and the industry as a whole there just is not a lot of downside without it selling at a bug discount to its peers. I am waiting for the earnings report but unless its a disaster I think we will be back over $70 very fast. >>

      wpcqe,

      While your above logic may be valid when using historical info, the market is always trying to look ahead. I don't know what is ahead for ZMH or their industry segment as a whole, but the trading is saying there is something negative in their future.

      The market ( trading ) is sometimes wrong but I don't like going against it. So I will not consider buying ZMH or others (bmet/syk) til they bottom and base for a while.

      Also, its always dangerous to guess a bottom. I've been burnt big time trying to do that in the past.

 
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