Needham & Company has maintained a Buy rating for ZimVie Inc. (NASDAQ: ZIMV), citing its potential as an acquisition target and its intrinsic value as a standalone company. The note, released on Tuesday, underscores the attractiveness of ZIMV’s portfolio and margin expansion potential.
Acquisition Potential
Recent reports suggest ZIMV is exploring strategic options, including a possible sale. Needham analysts estimate the company could fetch a value of $25-29 per share based on several factors:
- Comparable Transactions: Needham compares ZIMV to the recent sale of a similar dental business, suggesting a potential price of $26 per share.
- Broader Market Analysis: Taking into account the overall dental market and applying a Bull Case multiple, they project a higher valuation of $29 per share.
Potential Acquirers
The report identifies several potential acquirers, including strategic players and private equity firms:
- Strategic Buyers: Solventum (SOLV) is seen as a prime candidate due to a gap in its dental implant portfolio. Other strategic players like Dentsply Sirona (XRAY), Envista (NVST), Henry Schein (HSIC), and Straumann (STMN) are also mentioned, though antitrust concerns could pose challenges.
- Private Equity Firms: Recent activity in the dental space by private equity firms further supports the acquisition thesis.
Standalone Value
Regardless of an acquisition, Needham believes ZIMV shares remain a strong investment. They point to positive trends in the dental implant market and ZIMV’s potential for sustained margin improvement. The analysis suggests that even after a recent stock price increase, ZIMV remains reasonably valued.
Needham & Company’s report underscores the dual attractiveness of ZimVie Inc. shares, both as a potential acquisition target and as a standalone entity. With a robust portfolio and promising market conditions, ZIMV appears well-positioned for growth.
