Zimmer Biomet Holdings (ZBH) AI Stock Analysis

• Market Cap: $18.33B
• Dividend Yield: 1.04%
• Average Volume (3M): 2.60M
• Price to Earnings (P/E): 20.5
• Beta (1Y): 0.54
• Revenue Growth: 3.30%
• EPS Growth: -2.39%
• Country: US
• Employees: 17,000
• Sector: Healthcare
• Sector Strength: 40
• Industry: Medical - Devices
• EPS (TTM): 1.81
• Shares Outstanding: 197,847,900
• 10 Day Avg. Volume: 2,760,696
• 30 Day Avg. Volume: 2,603,134
• PEG Ratio: -1.42
• Price to Book (P/B): 1.42
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 13.35
• Enterprise Value/Market Cap: 1.36
• Enterprise Value/Revenue: 0.82
• Enterprise Value/Gross Profit: 4.57
• Enterprise Value/Ebitda: 2.71
• 1Y Price Target: $107.20
• Price Target Upside: 15.72% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 21

• Rating: 70 Outperform
• Price Target: $107.00 ▲( 15.50% Upside)

Zimmer Biomet Holdings exhibits strong financial performance with consistent growth and robust cash flows. Technical analysis signals some caution due to bearish trends. Valuation appears reasonable, though not overly attractive. The earnings call indicated solid operational performance but highlighted some challenges impacting near-term financial guidance. Overall, the company remains well-positioned in the Medical Devices industry, but investors should be mindful of potential headwinds.

Positive Factors

Business Strategy

Paragon 28 integration is looking good, and mergers and acquisitions remain a priority following the integration.

Product Innovation

The Oxford cementless partial knee is a key product launch as the only cementless partial on the market, which can save 10-15 minutes per procedure.

Software Development

Rosa 1.5 software upgrade offers a better user interface and allows for a faster and simpler procedure.

Negative Factors

Financial Outlook

The price target is lowered to $101 from $115, reflecting a more conservative outlook.

Market Performance

Zimmer Biomet is facing weak growth in the US knee segment, which has led to the implementation of sales force optimization measures.

Tariff Impact

Zimmer Biomet anticipates a $60-$80 million headwind to operating profit due to potential tariffs, particularly impacting the second half of the year.

Zimmer Biomet Holdings Business Overview & Revenue Model

Company Description

Zimmer Biomet Holdings, Inc., together with its subsidiaries, operates in the musculoskeletal healthcare business in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company designs, manufactures, and markets orthopaedic reconstructive products, such as knee and hip products; S.E.T. products, including sports medicine, biologics, foot and ankle, extremities, and trauma products; spine products comprising medical devices and surgical instruments; and face and skull reconstruction products, as well as products that fixate and stabilize the bones of the chest toss facilitate healing or reconstruction after open heart surgery, trauma, or for deformities of the chest. It also offers dental products that include dental reconstructive implants, and dental prosthetic and regenerative products, as well as robotic, surgical and bone cement products. The company's products and solutions are used to treat patients suffering from disorders of, or injuries to, bones, joints, or supporting soft tissues. It serves orthopedic surgeons, neurosurgeons, oral surgeons, dentists, hospitals, stocking distributors, healthcare dealers, and other specialists, as well as agents, healthcare purchasing organizations, or buying groups. The company was formerly known as Zimmer Holdings, Inc. and changed its name to Zimmer Biomet Holdings, Inc. in June 2015. Zimmer Biomet Holdings, Inc. was founded in 1927 and is headquartered in Warsaw, Indiana.

How the Company Makes Money

Zimmer 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 has shown strong financial performance with consistent revenue and profit growth. The balance sheet is stable, with manageable leverage, and cash flows are robust, supporting operational and strategic initiatives. However, there is room for improvement in return on equity.

Income Statement

Zimmer Biomet Holdings has shown strong performance with consistent revenue growth, particularly evident in the TTM period. Gross profit margin remains robust at over 70%, reflecting efficient cost management. The net profit margin has improved significantly from previous years, indicating enhanced profitability. EBIT and EBITDA margins also demonstrate solid operating performance, underscoring cost efficiency and operational strength.

Balance Sheet

The balance sheet presents a stable financial position with a manageable debt-to-equity ratio, indicating balanced leverage. Zimmer Biomet has a healthy equity ratio, demonstrating a solid capital structure. However, the return on equity shows a moderate performance, suggesting room for improvement in generating returns from shareholders' equity.

Cash Flow

Cash flow analysis reflects positive trends, with a strong operating cash flow to net income ratio, indicating efficient cash generation from operations. Free cash flow has grown over the periods, supporting future investments and debt reduction. The company maintains a prudent approach to capital expenditures, bolstering its cash flow position.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
7.70B	7.68B	7.39B	6.94B	6.83B	7.02B
	Gross Profit
5.47B	5.49B	5.31B	4.92B	4.87B	4.90B
	EBIT
1.31B	1.29B	1.28B	1.06B	860.30M	723.30M
	EBITDA
2.30B	2.25B	2.21B	2.21B	2.16B	969.70M
	Net Income Common Stockholders
913.40M	903.80M	1.02B	231.40M	401.60M	-137.40M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.38B	525.50M	415.80M	375.70M	378.10M	802.10M
	Total Assets
22.18B	21.37B	21.50B	21.07B	23.46B	24.42B
	Total Debt
7.18B	6.20B	6.00B	5.70B	7.08B	8.13B
	Net Debt
5.79B	5.68B	5.58B	5.32B	6.70B	7.32B
	Total Liabilities
9.78B	8.89B	9.01B	9.04B	10.79B	12.22B
	Stockholders Equity
12.40B	12.47B	12.48B	12.02B	12.66B	12.20B
Cash Flow		Free Cash Flow
1.35B	1.14B	1.20B	1.10B	1.35B	1.09B
	Operating Cash Flow
1.65B	1.50B	1.58B	1.28B	1.50B	1.20B
	Investing Cash Flow
-799.10M	-888.10M	-778.90M	-529.20M	-503.60M	-613.80M
	Financing Cash Flow
141.00M	-484.50M	-763.50M	-843.80M	-1.31B	-421.80M

Zimmer Biomet Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 92.64
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 92.64 is below the 20-day moving average (MA) of 96.59, below the 50-day MA of 102.40, and below the 200-day MA of 105.74, indicating a bearish trend. The MACD of -2.32 indicates Positive momentum. The RSI at 37.93 is Neutral, neither overbought nor oversold. The STOCH value of 13.77 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ZBH.

Zimmer Biomet Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BSX	78 Outperform	$154.60B	76.57	9.65%	―	19.35%	14.31%
SYK	78 Outperform	$143.93B	50.82	14.26%	0.87%	10.76%	-15.22%
SNN	77 Outperform	$12.64B	30.33	7.82%	2.51%	4.58%	55.99%
ZBH	70 Outperform	$18.33B	20.53	7.31%	1.04%	3.30%	-2.39%
GMED	68 Neutral	$7.98B	44.10	4.63%	―	32.26%	112.87%
SSKN	54 Neutral	$10.80M	―	-151.23%	―	3.30%	31.84%
Sector *	53 Neutral	$5.14B	3.23	-45.01%	2.85%	17.55%	-0.69%

Zimmer Biomet Holdings Corporate Events

Zimmer Biomet Announces Leadership Changes in 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.