Zimmer Biomet Holdings, Inc. ZBH recently received Food and Drug Administration ("FDA") 510(k) clearance for the OsseoFit Stemless Shoulder System for total shoulder replacement. The system is designed to match the natural humeral (upper shoulder bone) anatomy to optimize anatomical fit while maximizing the preservation of healthy bone. 

The OsseoFit Stemless Shoulder System expands the company's expansive total shoulder portfolio. The company plans to launch the system commercially in the first quarter of 2025.

ZBH’s Likely Stock Trend Following the News

Following the announcement, shares of ZBH moved 0.1% south to $106.74 on Friday. The company has been gaining synergies from its expanding shoulder portfolio, which is part of its S.E.T. business. Zimmer Biomet is currently on a diversification journey with its S.E.T. business. It has strategically grown S.E.T. sales by at least mid-single digits in recent times. Henceforth, we expect the latest FDA clearance to motivate market sentiment in favor of ZBH stock in the upcoming days. 

ZBH currently has a market capitalization of $22.09 billion. Its earnings surpassed estimates in three of the trailing four quarters and missed in one, delivering an average surprise of 1.76%.

More on ZBH’s OsseoFit Stemless Shoulder System 

OsseoFit Stemless Shoulder System integrates with Identity Humeral Heads with Versa-Dial Technology for infinite offset placement as well as the Alliance Glenoid for a broad range of glenoid options to adapt to a patient's unique anatomy. The system combines an anatomically shaped implant to support bone conservation. It is designed for stable initial fixation with proprietary OsseoTi Porous Metal Technology for biological fixation. 

The anatomically designed left or right-sided anchor implants feature fins that create a press-fit during insertion and contain fully porous windows. The fin geometry and anchor spacing of the implant determine proper orientation and fit into the natural bone and help avoid cortical impingement while reaching dense bone areas. 

In addition, the design includes strategically located anterior reattachment suture holes on the anchor to facilitate subscapularis repair. The system is available in a singular instrument tray to maximize workflow and sterile process efficiency, fitting nicely in a variety of settings, including ambulatory surgical centers.

Industry Prospects Favor ZBH

Per a report from Maximize Market Research, the total shoulder replacement market was valued at $1.66 billion in 2023 and is expected to grow at a compound annual rate of 7.6% from 2024 to 2030, reaching nearly $2.77 billion. The increasing incidence of arthritis is the major contributor to disability among adults and the geriatric population. The growing global geriatric population and increased susceptibility to osteoarthritis are key market growth drivers. 

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Recent Developments by ZBH

Earlier this month, Zimmer Biomet received FDA 510(k) clearance for its Persona SoluTion Porous Plasma Spray (“PPS”) Femur. Persona SoluTion PPS Femur is a total knee implant component offering an alternative for patients with sensitivities to bone cement. The latest development adds to the company’s clinically proven Persona Knee System. The company expects to commercially launch Persona SoluTion PPS Femur in the United States in the first quarter of 2025. 

The previous month, Zimmer Biomet received FDA Premarket Approval Application (“PMA”) Supplement for the Oxford Cementless Partial Knee the previous month. 

ZBH’s Price Performance

In the past year, shares of ZBH have lost 10.1% against the industry’s 13.9% growth. 

ZBH’s Zacks Rank and Key Picks

ZBH currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space are Haemonetics HAE, Penumbra PEN and ResMed RMD, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Haemonetics has an earnings yield of 5.02% compared with the industry’s 1.18%. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 19.39%. The company’s shares have risen 1.8% compared with the industry’s 23.1% growth in the past year. Estimates for HAE’s 2025 EPS have moved north 0.4% to $4.59 in the past 30 days. 

Estimates for Penumbra’s 2024 EPS have moved north 8.1% to $2.79 in the past 30 days. Shares of the company have surged 60.6% in the past year compared with the industry’s growth of 32.7%. PEN’s earnings surpassed estimates in three of the trailing four quarters and missed in one, delivering an average surprise of 10.54%.

Estimates for ResMed’s fiscal 2025 EPS have risen 2.7% in the past 30 days. Shares of the company have surged 86.3% in the past year compared with the industry’s 32.1% growth. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average beat being 6.4%. In the last reported quarter, it delivered an earnings surprise of 8.4%.

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