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Zimmer Biomet Holdings (ZBH)
NYSE:ZBH
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Zimmer Biomet Holdings
(NYSE:ZBH)71Outperform
Positive Factors
Product Launches
A host of new product launches in key segments can drive growth acceleration.
Strategic Acquisition
The deal to acquire Paragon 28 makes strategic sense and will increase ZBH's corporate-wide growth rate.
Negative Factors
Market Performance
ZBH lost market share in the recon, knee, and hip segments.
Zimmer Biomet Holdings (ZBH) vs. S&P 500 (SPY)
Market Cap
$20.70B
Dividend Yield0.91%
Average Volume (3M)1.97M
Price to Earnings (P/E)23.5
Beta (1Y)0.72
Revenue Growth3.84%
EPS Growth-9.29%
CountryUS
Employees18,000
SectorHealthcare
Sector Strength74
IndustryMedical Equipment & Supplies
Share Statistics
EPS (TTM)4.44
Shares Outstanding199,063,170
10 Day Avg. Volume1,789,129
30 Day Avg. Volume1,972,897
Financial Highlights & Ratios
PEG Ratio0.16
Price to Book (P/B)N/A
Price to Sales (P/S)2.73
Price to Cash Flow (P/CF)10.40
P/FCF Ratio9.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$120.85Price Target Upside16.21% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering21
Zimmer Biomet Holdings Business Overview & Revenue Model
Company DescriptionZimmer Biomet Holdings, Inc. is a global medical technology company that specializes in designing, manufacturing, and marketing orthopedic reconstructive products, including joint replacements, dental implants, and other musculoskeletal products. The company operates in sectors such as orthopedics, sports medicine, and biologics, providing innovative solutions to improve the quality of life for patients worldwide.
How the Company Makes MoneyZimmer Biomet makes money through the sale of its diverse range of orthopedic and musculoskeletal products, which include joint replacement systems for knees, hips, and shoulders, as well as dental reconstructive implants and surgical tools. The company's revenue model is primarily based on direct sales to hospitals, surgical centers, and healthcare providers globally. Key revenue streams include the sales of orthopedic products, particularly those used in joint reconstruction surgeries, and the provision of related services. Significant partnerships with healthcare institutions and collaborations in R&D also contribute to its earnings by expanding its product offerings and enhancing its market presence.
Zimmer Biomet Holdings Financial Statement Overview
Summary
Zimmer Biomet Holdings showcases a strong financial performance with solid profitability, efficient operations, and robust cash flow management. The company demonstrates a positive growth trajectory and stable financial position, although there is room to optimize leverage.Income Statement
Zimmer Biomet Holdings shows strong revenue growth with a TTM of 2.7%. Gross profit margin is robust at 66.3%, and net profit margin is healthy at 14.3%. EBIT and EBITDA margins are 18.1% and 33.0% respectively, indicating strong operational efficiency. Overall, the company demonstrates solid profitability with positive growth trends.85
Very Positive
Balance Sheet
The company's debt-to-equity ratio is moderate at 0.53, indicating manageable leverage. Return on equity is impressive at 8.8%, reflecting effective use of equity. With an equity ratio of 56.9%, Zimmer Biomet Holdings maintains a stable financial position. The balance sheet reflects a solid foundation, though debt levels could be optimized further.78
Positive
Cash Flow
Free cash flow growth is stable, with a positive trend from previous years. Operating cash flow to net income ratio is strong at 1.46, indicating good cash generation capabilities. The free cash flow to net income ratio stands at 1.07, suggesting efficient conversion of income into cash. Cash flow management appears robust, supporting operational and strategic needs.82
Very Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 7.60B | 7.39B | 6.94B | 6.83B | 7.02B | 7.98B | Gross Profit |
| 5.03B | 5.31B | 4.92B | 4.87B | 4.90B | 5.73B | EBIT |
| 1.38B | 1.28B | 1.06B | 860.30M | 723.30M | 1.14B | EBITDA |
| 2.51B | 2.21B | 2.21B | 2.16B | 969.70M | 2.40B | Net Income Common Stockholders |
| 1.08B | 1.02B | 231.40M | 401.60M | -137.40M | 1.13B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 415.80M | 415.80M | 375.70M | 378.10M | 802.10M | 617.90M | Total Assets |
| 21.50B | 21.50B | 21.07B | 23.46B | 24.42B | 24.64B | Total Debt |
| 6.00B | 6.00B | 5.70B | 7.08B | 8.13B | 8.22B | Net Debt |
| 5.58B | 5.58B | 5.32B | 6.70B | 7.32B | 7.60B | Total Liabilities |
| 9.01B | 9.01B | 9.04B | 10.79B | 12.22B | 12.25B | Stockholders Equity |
| 12.48B | 12.48B | 12.02B | 12.66B | 12.20B | 12.39B |
| Cash Flow | Free Cash Flow | ||||
| 1.16B | 1.20B | 1.10B | 1.35B | 1.09B | 1.18B | Operating Cash Flow |
| 1.58B | 1.58B | 1.28B | 1.50B | 1.20B | 1.59B | Investing Cash Flow |
| -817.70M | -778.90M | -529.20M | -503.60M | -613.80M | -729.30M | Financing Cash Flow |
| -495.30M | -763.50M | -843.80M | -1.31B | -421.80M | -779.90M |
Zimmer Biomet Holdings Technical Analysis
Negative
103.99
Price Trends
105.75
Negative
106.60
Negative
108.03
Negative
Market Momentum
-0.41
Negative
47.08
Neutral
51.41
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZBH, the sentiment is Negative. The current price of 103.99 is above the 20-day moving average (MA) of 103.42, below the 50-day MA of 105.75, and below the 200-day MA of 108.03, indicating a neutral trend. The MACD of -0.41 indicates Negative momentum. The RSI at 47.08 is Neutral, neither overbought nor oversold. The STOCH value of 51.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ZBH.
Zimmer Biomet Holdings Risk Analysis
Zimmer Biomet Holdings disclosed 28 risk factors in its most recent earnings report. Zimmer Biomet Holdings reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Zimmer Biomet Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $148.79B | 50.24 | 14.51% | 0.82% | 10.23% | -5.74% | |
78 Outperform | $152.91B | 83.05 | 8.51% | ― | 17.60% | 16.84% | |
78 Outperform | $398.27B | 28.57 | 19.68% | 2.96% | -4.51% | 3.69% | |
77 Outperform | $119.32B | 28.28 | 8.63% | 2.96% | 2.72% | 4.48% | |
71 Outperform | $20.70B | 23.46 | 7.25% | 0.91% | 3.84% | -9.29% | |
66 Neutral | $12.74B | 30.68 | 5.04% | 2.44% | 2.60% | 37.89% | |
49 Neutral | $7.05B | 0.34 | -55.09% | 2.46% | 25.27% | -3.43% |
* Healthcare Sector Average
Performance Comparison
ZBH
Zimmer Biomet Holdings
103.99
-20.77
-16.65%
BSX
Boston Scientific
103.61
36.19
53.68%
JNJ
Johnson & Johnson
165.42
11.03
7.14%
MDT
Medtronic
93.03
10.31
12.46%
SNN
Smith & Nephew Snats
30.00
3.30
12.36%
SYK
Stryker
389.92
38.16
10.85%
Zimmer Biomet Holdings Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -3.94% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view, highlighting consistent revenue growth, strategic acquisitions, and strong performance in the S.E.T. segment, but also noting challenges such as ERP issues and FX headwinds impacting margins.Highlights
Consistent Revenue Growth
Zimmer Biomet reported nearly 5% constant currency sales growth for Q4 2024, marking the 12th consecutive quarter of mid-single-digit or better growth.
Strategic Acquisition of Paragon 28
Zimmer Biomet announced the acquisition of Paragon 28, a leader in the $5 billion foot and ankle space, expected to close in the first half of 2025, enhancing their lower extremity product offerings.
Positive Pricing Trends
Achieved positive pricing for the fourth consecutive quarter with 60 basis points improvement, signaling strong pricing power.
Operational Excellence Initiatives
Implemented new leadership in key areas and announced over 50 new product launches in the next 36 months, focusing on innovation and diversification.
Strong Performance in S.E.T. Segment
The S.E.T. segment grew 8.4% globally, outpacing growth in knees and hips, indicating a successful diversification strategy.
Lowlights
ERP Implementation Challenges
Faced ERP implementation issues in 2024 which impacted Q4 performance, though the company exited 2024 at pre-ERP shipping levels.
Foreign Exchange Headwinds
2025 guidance anticipates 150 to 200 basis points of headwind from currency fluctuations, significantly impacting EPS growth projections.
Higher Non-Operating Expenses
Reported higher non-operating expenses, including increased interest expenses due to higher debt and interest rates.
Company Guidance
During the Zimmer Biomet fourth-quarter 2024 earnings call, the company reported a nearly 5% constant currency revenue growth for the quarter, marking the 12th consecutive quarter of mid-single-digit growth. The earnings results included $8 in adjusted earnings per share and free cash flow of $1.5 billion, aligning with the original 2024 financial guidance. Looking ahead to 2025, Zimmer Biomet provided guidance for full-year constant currency revenue growth of 3% to 5% and adjusted earnings per share ranging from $8.15 to $8.35, excluding impacts from the Paragon 28 acquisition. The company's strategic focus areas for 2025 include people and culture, operational excellence, and innovation and diversification, with plans to launch over 50 new products in the next 36 months. Additionally, the acquisition of Paragon 28 is anticipated to expand Zimmer Biomet's offerings in the foot and ankle space, potentially enhancing growth opportunities in the ASC market. Overall, the company aims to continue its trajectory of revenue, earnings per share, and free cash flow growth in 2025 and beyond.Zimmer Biomet Holdings Corporate Events
Executive/Board Changes
Zimmer Biomet Announces Leadership Changes in 2025
Neutral
Feb 25, 2025
On February 25, 2025, Zimmer Biomet Holdings announced changes to its Board of Directors due to the mandatory retirement policy, with Chairman Christopher Begley set to retire at the 2025 Annual Meeting. Ivan Tornos, the current President and CEO, will assume the role of Chairman, while Michael Farrell will become the Lead Independent Director. These changes, effective May 29, 2025, aim to strengthen the company’s leadership and strategic direction.
M&A TransactionsBusiness Operations and Strategy
Zimmer Biomet to Acquire Paragon 28 for $1.2 Billion
Positive
Jan 29, 2025
On January 28, 2025, Zimmer Biomet Holdings announced a definitive agreement to acquire Paragon 28, a leading company in the foot and ankle orthopedic segment, for approximately $1.2 billion. The deal is expected to bolster Zimmer Biomet’s offerings in the high-growth foot and ankle segment, with projections to enhance revenue and earnings within 24 months of closing. The merger will leverage Paragon’s innovative product portfolio and Zimmer Biomet’s global reach to address unmet patient needs, with anticipated benefits including accelerated revenue growth and expanded market penetration.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.