Our Wide Moat for Zimmer Biomet Provided Ballast Through the Pandemic

With the addition of Biomet, Zimmer is the undisputed king of large joint reconstruction, by far. We expect favorable demographics, which include aging baby boomers and rising obesity, to fuel solid demand for large-joint replacement that should offset price declines. However, Zimmer stumbled into a series of pitfalls in 2016-2017, including integration issues, supply and inventory challenges, and quality concerns. New management's efforts to turn around the firm have been admirable, but the pandemic has put a damper on progress.