Zimmer Biomet (NYSE:ZBH) and Inspire Medical Systems (NYSE:INSP) Financial Contrast

Inspire Medical Systems (NYSE:INSP) and Zimmer Biomet (NYSE:ZBH) are both healthcare companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, valuation, analyst recommendations, risk, dividends, profitability and institutional ownership.

Insider and Institutional Ownership

94.9% of Inspire Medical Systems shares are held by institutional investors. Comparatively, 88.9% of Zimmer Biomet shares are held by institutional investors. 2.2% of Inspire Medical Systems shares are held by company insiders. Comparatively, 1.3% of Zimmer Biomet shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Inspire Medical Systems and Zimmer Biomet”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Inspire Medical Systems	$911.98 million	1.95	$145.42 million	$3.44	17.81
Zimmer Biomet	$8.23 billion	2.45	$705.20 million	$3.95	26.94

Zimmer Biomet has higher revenue and earnings than Inspire Medical Systems. Inspire Medical Systems is trading at a lower price-to-earnings ratio than Zimmer Biomet, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Inspire Medical Systems has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500. Comparatively, Zimmer Biomet has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500.

Profitability

This table compares Inspire Medical Systems and Zimmer Biomet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Inspire Medical Systems	11.43%	7.32%	6.39%
Zimmer Biomet	8.95%	13.02%	7.17%

Analyst Recommendations

This is a summary of current recommendations for Inspire Medical Systems and Zimmer Biomet, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Inspire Medical Systems	3	13	3	1	2.10
Zimmer Biomet	1	16	7	0	2.25

Inspire Medical Systems currently has a consensus price target of $71.24, indicating a potential upside of 16.29%. Zimmer Biomet has a consensus price target of $112.74, indicating a potential upside of 5.96%. Given Inspire Medical Systems’ higher possible upside, equities analysts plainly believe Inspire Medical Systems is more favorable than Zimmer Biomet.

Summary

Zimmer Biomet beats Inspire Medical Systems on 9 of the 15 factors compared between the two stocks.

About Inspire Medical Systems

Inspire Medical Systems is a medical technology company focused on treatments for obstructive sleep apnea, a condition in which breathing repeatedly stops or becomes restricted during sleep. Founded in 2007 and based in Minnesota, the company develops implantable devices intended for certain patients who cannot use or benefit from conventional positive airway pressure therapy. Its primary product, the Inspire Upper Airway Stimulation system, uses an implanted device to monitor breathing and deliver mild stimulation to the hypoglossal nerve, helping keep the airway open during sleep.

About Zimmer Biomet

Zimmer Biomet Holdings, Inc. develops and manufactures medical devices and technologies used in musculoskeletal care. Its products support orthopedic procedures involving the hip, knee, shoulder, and extremities, as well as trauma care, sports medicine, and related surgical applications. The company also offers surgical technologies, including robotic and digital solutions designed to assist clinicians with planning and performing procedures. Its products and services are used by hospitals, surgeons, and other healthcare providers.