ZBH Stock to Benefit From Global Expansion Despite Macro Issues

Core Viewpoint - Zimmer Biomet is experiencing growth driven by strategic product launches and market expansion, particularly in emerging markets, despite facing macroeconomic challenges and operational pressures [2][8][9]. Group 1: Revenue Growth and Market Expansion - Strong revenue growth in emerging markets, particularly in the Asia Pacific region, is a key driver for Zimmer Biomet [2]. - The company is on a diversification journey with its S.E.T. business, expecting mid-single-digit sales growth to continue into 2025 and 2026 [3]. - Zimmer Biomet's international business exceeded sales expectations in the third quarter, supported by strong demand in reconstructive knees, hips, and S.E.T. categories [18]. Group 2: Product Launches and Market Share - The company anticipates significant market share gains from upcoming product launches, including the Oxford Partial cementless Knee and Z1 HAMMR in Europe [10]. - Zimmer Biomet has been witnessing strong market share gains in reconstructive knees and hips across key geographies [18]. Group 3: Financial Performance and Challenges - In the third quarter of 2024, Zimmer Biomet's net sales were negatively impacted by foreign exchange rates, with an expected adverse impact of 75 basis points for the full year [15]. - The company faced a 3.9% increase in the cost of products sold and a 3.1% rise in selling, general, and administrative expenses, leading to a contraction in adjusted gross and operating margins [12]. - Staffing shortages, supply chain issues, and geopolitical complications are creating significant pressure on revenues and operating profit [17].