Being the fourth horse in a race isn't easy -- especially if the horses ahead of you are bigger. Nevertheless, orthopedics company Biomet (NASDAQ:BMET) has managed to stay in the running and grow its business at a rate of roughly 15% a year over the past decade.

Reporting results for the third fiscal quarter (ending in February), the company announced that revenue was up 12% -- netting out currency and acquisitions -- and "adjusted" net income grew 17% over the prior year.

Although worldwide sales of hip and extremity products were a bit sluggish (up 8% and 7%, respectively), sales of Biomet's knee products climbed 27%. Although the company is the No. 4 player in the knee market, many surgeons consider Biomet's newer products the best, and the company appears to be gaining market share.

While the company's past growth is nothing to apologize for, better things could yet be ahead. Biomet has historically lagged rivals like Zimmer (NYSE:ZMH) and Stryker (NYSE:SYK) in terms of developing new technologies, but that appears to be changing.

Not only is the company conducting research into hot areas like artificial spinal discs and ceramic hip replacements, but the company is also aggressively pursuing better minimally invasive technology for its knee products. What's more, Biomet is somewhat unique in the orthopedics space as the only company with a product offering in every category, including bone-growth stimulation and sports medicine.

That's not to say that Biomet presents a risk-free opportunity. It does occupy the fourth spot in the market behind Zimmer, Johnson & Johnson's (NYSE:JNJ) DePuy business, and Stryker. No. 5 player Smith and Nephew (NYSE:SNN) isn't far behind.

What's more, the orthopedic market itself appears to be changing a bit. Companies are starting to see some push-back on pricing. And a new practice called "gain sharing," in which hospitals and physicians share cost savings for using certain devices or products, could pressure pricing even further.

In addition, the government has recently become more aggressive in investigating sales practices across the industry, as seen in a probe of Medtronic's (NYSE:MDT) Sofamor Danek business, and nobody yet knows what such investigations may uncover.

No matter what valuation metric you want to look at (price-to-earnings, price-to-sales, enterprise value-to-free cash flow), Biomet shares look expensive on an absolute basis. On a relative basis, though, Biomet appears to be slightly undervalued when compared with peers like Stryker and Zimmer. Although Biomet's growth is not quite as robust as its peers, the company does have a higher return on assets and return on equity.

There's a second point that I'd like to make on valuation. In the roughly 10 years that I've followed this company, these shares have almost always looked expensive, and the stock is up some 600% or so in that time period. I have no idea whether Biomet's stock will be able to repeat that performance over the next 10 years, but I have no doubt that the market for orthopedic medical devices is only going to get stronger over that time.

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Fool contributor Stephen Simpson owns shares of Johnson & Johnson. The Motley Fool has a disclosure policy.