What Happened: Needham downgraded the two dental companies to Hold.

ZimVie reported adjusted EPS of 27 cents, beating the consensus of 26 cents. The company’s sales of $111.52 million fell below the consensus of $113.4 million.

Also Read: Dentsply Sirona Q4: Earnings Miss, 10% Sales Drop, Soft 2025 Outlook And More

Why It Matters: Interest rates play a key role because major purchases are usually financed. While some rate cuts may start around midyear, high interest rates will likely continue to weigh on capital demand.

Adding to these challenges, ongoing staffing shortages in the provider market could limit capacity even if patient demand increases.

Analyst David Saxon writes that Dentsply Sirona continues to lose market share. The company is overexposed to equipment, he argues. That has been one of the softest product categories in dentistry, he adds. Low-cost/value launches from competitors have created pricing pressure, and interest rates remain a headwind to demand.

ZimVie is also losing implant market share — 60% of its portfolio. The company has upcoming initiatives meant to drive improved execution. The analyst expects it will take time for these to get ZimVie’s growth to be at or above the market’s growth.

Needham also comments on tariff exposure on another dental player, Align Technology, Inc (NASDAQ:ALGN).

The clear aligners and iTero sleeves are covered under the USMCA (US-Mexico-Canada Agreement) and are exempt from tariffs until April 2025

Price Action: ALGN stock is down 3.59% at $158.66. XRAY stock is down 2.28% at $14.98. ZIMV stock is down 6.64% at $11.81 at the last check Thursday.

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