ZIMV - ZimVie: Shrinking Its Way To Profitability

2024-02-12 12:42:00 ET

Summary

• ZimVie Inc. plans to divest its Spine business and focus on the higher growth Dental market. The Dental market only offers modest growth with increasing competition, though.
• The divestment of the Spine business will bring in cash and strengthen ZimVie's balance sheet, but the company still faces challenges in generating profits.
• If the Spine sale goes smoothly and Dental demand improves, ZimVie may end up proving itself reasonably inexpensive. I believe the risk of ongoing issues is too great, though.

Since being spun-out from Zimmer Biomet Holdings ( ZBH ) in early 2022, ZimVie Inc. ( ZIMV ) has faced end market headwinds and reported fairly lackluster results. ZimVie now plans on divesting its Spine business so that it can focus on the higher growth Dental opportunity. While this will bring in a large amount of cash, and help ZimVie to shore up its balance sheet , it ultimately may not make the company much more appealing. Dental is the more attractive end market, but it still offers only modest growth with increasing competition....

For further details see: