ZimVie (ZIMV), mcap=$229, price $8.78 vs $8.97

ZIMV pitch:
– Recent spin-off from Zimmer Biomet with shares down 80% from the first day of trading.
– Orthopedics company offering spine surgery solutions and dental implants.
– A stable, 65% gross margin business.
– Set to benefit from the recovery in elective surgery activity after the pandemic.
– Margins’ improvement potential from the current 9% to 15-20% peer levels.
– Trades far below peer group on a revenue multiple.
– Trailing revenues were weak due to distortion by several transitory factors.

ZIMV valuation:
– Current EV/Sales of 0.75x is far below the peer group’s 3.3x.
– Full-recovery EV/EBIT of around 7x vs around 15x for the peer group.
– At 15x multiple would be valued at $37/share.

Exp. gain: +300% to $37/share.

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