Needham & Company maintained a Buy rating for ZimVie Inc. (ZIMV) in a note Tuesday, highlighting its potential acquisition by another company and its overall attractiveness even without one.
The report cites recent news suggesting ZIMV is "considering options including a potential sale of the company." Needham analysts believe ZIMV's "portfolio and margin expansion potential" make it an attractive acquisition target, estimating a potential value of "$25-29 per share."
Several factors contribute to this valuation. Needham compares ZIMV to the recent sale of a similar dental business by another company, suggesting a potential price of "$26 for ZIMV."
Additionally, they consider the broader dental market and their own "Bull Case multiple" to arrive at a higher figure of "$29 per share."
The report identifies several potential acquirers, including both strategic players and private equity firms. Solventum (SOLV) is considered the most likely strategic buyer due to a gap in its dental implant portfolio.
However, the recent spin-off of Dentsply Sirona may prevent them from making a move in the near future. Other strategic players include Dentsply Sirona (XRAY), Envista (NVST), Henry Schein (HSIC), and Straumann (STMN), but antitrust concerns could arise. Private equity firms are also seen as potential contenders, with a recent acquisition in the dental space cited as an example.
Regardless of a potential acquisition, Needham believes ZIMV shares are a good investment. They report positive signs in the dental implant market and believe ZIMV is positioned for "sustained margin improvement."
Their analysis suggests ZIMV remains "reasonably valued" even after a recent stock price increase. Overall, Needham emphasizes the attractiveness of ZIMV shares, both as a potential acquisition target and as a standalone company.