ZBH - ZimVie crashes 37% to hit a post IPO-low after Q4 earnings

The shares of the MedTech company ZimVie ( NASDAQ: ZIMV ) lost ~37% in the morning hours Thursday to reach the lowest level since its 2022 IPO after reporting lower-than-expected Q4 2022 financials and setting its guidance below the consensus.

ZimVie ( ZIMV ), which IPO’ed a year ago as the publicly-traded spinoff of Zimmer Biomet’s ( ZBH ) dental and spine businesses, reported ~$229.1M in revenue for the quarter, indicating a ~12% YoY drop.

Underwhelming third-party net sales in the dental and spine segments contributed to the contraction adding $115.8M and $112.3M to the topline with ~12% YoY and ~17% YoY decline, respectively, amid a slowdown in China ahead of volume-based procurement.

As one-off brand rationalization charges impacted the bottom line last year, the net loss for the quarter more than halved to $30.3M amid cost-saving measures, lower inventory charges, and lower SG&A expenses.

Meanwhile, full-year net sales slipped ~10% YoY to $913.9M while adj. diluted earnings improved ~30% YoY to $1.84 per share.

For 2023, ZimVie ( ZIMV ) projects $825M – $850M in net sales and $0.30 - $0.50 in adj. EPS compared to ~$924.6M and $1.29 in the consensus, respectively.

Seeking Alpha contributor Macrotips Trading downgraded ZimVie ( ZIMV ) to Hold from Buy in November, citing its excessive leverage.

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