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Zimmer Biomet Holdings (ZBH)
NYSE:ZBH
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Zimmer Biomet Holdings
(NYSE:ZBH)
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Rating:65Neutral
Price Target:
$96.00
▼(-3.51% Downside)
Action:DowngradedDate:02/11/26
The score is driven primarily by solid multi-year financial performance and strong cash generation, supported by earnings-call commitments to free cash flow growth and material buybacks. It is held back by margin and leverage watch items, tempered 2026 growth guidance with execution risk (salesforce transition and pricing pressure), and a mixed technical trend (below key longer-term moving averages with negative MACD).
Positive Factors
Technological Advancements
The FDA clearance of ROSA Knee with OptimiZe enhances Zimmer Biomet's product offerings, supporting long-term growth by improving surgical outcomes and maintaining competitive advantage in robotic-assisted surgery.
Strategic Acquisitions
The acquisition of Monogram Technologies strengthens Zimmer Biomet's robotics capabilities, enhancing its market position and supporting long-term growth through expanded product offerings in orthopedic procedures.
Revenue Growth
Consistent revenue growth, particularly in the U.S., demonstrates Zimmer Biomet's expanding market reach and successful product adoption, supporting its long-term financial health.
Negative Factors
Emerging Markets Challenges
Challenges in emerging markets could hinder Zimmer Biomet's growth potential, impacting its ability to capitalize on new opportunities and diversify revenue streams.
Net Profit Margin Pressure
Decreasing net profit margins suggest potential cost pressures or pricing challenges, which could affect Zimmer Biomet's profitability and financial flexibility over time.
U.S. Revision Market Slowdown
A slowdown in the U.S. revision market may limit Zimmer Biomet's growth in a key segment, potentially affecting revenue and market share in the orthopedic sector.
Zimmer Biomet Holdings (ZBH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$19.47B
Dividend Yield1.05%
Average Volume (3M)2.12M
Price to Earnings (P/E)27.7
Beta (1Y)0.55
Revenue Growth5.47%
EPS Growth-23.03%
CountryUS
Employees17,000
SectorHealthcare
Sector Strength45
IndustryMedical - Devices
Share Statistics
EPS (TTM)2.42
Shares Outstanding195,652,010
10 Day Avg. Volume1,815,818
30 Day Avg. Volume2,122,958
Financial Highlights & Ratios
PEG Ratio-1.26
Price to Book (P/B)1.40
Price to Sales (P/S)2.16
P/FCF Ratio12.09
Enterprise Value/Market Cap1.37
Enterprise Value/Revenue3.24
Enterprise Value/Gross Profit4.64
Enterprise Value/Ebitda12.02
Forecast
1Y Price Target
$101.06Price Target Upside1.58% Upside
Rating ConsensusHold
Number of Analyst Covering20
EPS Forecast (FY)8.4
Revenue Forecast (FY)$8.55B
Zimmer Biomet Holdings Business Overview & Revenue Model
Company DescriptionZimmer 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 MoneyZimmer Biomet generates revenue through the sale of its medical devices and products primarily in the orthopedic and spine markets. The company’s key revenue streams include sales from joint reconstruction products, which encompass knee and hip replacement systems, and spinal products, which include devices for spinal fusion and deformity correction. Additional revenue is derived from dental products and surgical solutions. Zimmer Biomet also engages in partnerships and collaborations with healthcare providers and institutions to enhance its product offerings and market reach. The company benefits from a diverse customer base, including hospitals, surgical centers, and clinics, which contribute to a steady stream of revenue. Additionally, ongoing advancements in technology and product innovation play a significant role in driving sales and maintaining competitive advantage in the healthcare sector.
Zimmer Biomet Holdings Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyZimmer Biomet Holdings Earnings Call Summary
Earnings Call Date:Feb 10, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 05, 2026
Earnings Call Sentiment Neutral
The call balanced encouraging operational and product momentum (notably product adoption in hips/knees, robotics strength, robust free cash flow generation, and a sizable buyback program) with significant near-term execution risks (a large U.S. salesforce transformation, pricing/gross margin pressure, higher interest expense and fragile international pockets). Management provided concrete guidance (1%–3% revenue growth and $8.30–$8.45 adjusted EPS for 2026) and emphasized long-term upside from innovation and channel changes while acknowledging short-term disruption.Q4-2025 Updates
Positive Updates
Solid Q4 and FY25 Organic Revenue Growth
Q4 organic constant-currency sales grew 5.4% (consolidated); U.S. organic growth 5.7% and International organic growth 5.0%. Full-year 2025 organic constant-currency sales grew 3.9%.
Strong Product Adoption in Joints
U.S. knee revenue +6% in Q4 with Persona OsteoTide ~35% penetration and high adoption of Oxford partial cementless knee; U.S. hip revenue nearly +8% in Q4 with implant C1 representing >35% of U.S. hip stems.
Robotics, Technology and Capital Sales Momentum
U.S. technology/data/bone cement/surgical cells increased >10% in Q4, driven by the strongest robotic capital sales quarter in over two years; continued expansion of robotics/navigation offerings including MBOS (Monogram).
Healthy Cash Generation and Free Cash Flow
Q4 operating cash flow $517M and Q4 free cash flow $368M; full-year 2025 free cash flow $1.172B, up >11% year-over-year; company expects free cash flow growth of 8%–10% in 2026 and ~80% FCF conversion.
Adjusted EPS Growth and Share Count Reduction
Q4 adjusted diluted EPS $2.42, up 4.8% year-over-year; full-year adjusted EPS $8.20. Fully diluted shares were 198.1M (down YoY), aided by share repurchases of $250M in Q4.
Capital Return and Balance Sheet Actions
Board approved buyback authority and activity: $250M repurchased in Q4 2025, board authorization up to $1.5B, and management disclosed share buybacks in 2026 of up to $750M; cash & cash equivalents ~ $592M at year-end.
Robust Innovation and Portfolio Progress
Management highlighted closed core portfolio gaps, the 'magnificent seven' platform, iodine-coated devices (Japan launch), Oxford partial cementless knee, and Monogram/MBOS—pipeline ~3x what it was a few years ago with multiple launches planned in 2026.
Progress on U.S. Go-to-Market Changes
Company has completed ~one-third of the transition to a dedicated/specialized U.S. sales channel; plans to complete majority conversion by end of 2027 and to add specialized reps (e.g., 200+ robotics reps) to target higher growth areas like SCT and ASCs.
Negative Updates
Tempered 2026 Revenue Guidance
Management guided full-year 2026 organic constant-currency revenue growth to a low single-digit range of 1%–3%, down from recent mid-single digit exits, primarily to account for U.S. salesforce transition risk and other uncertainties.
Salesforce Transition Disruption Risk
Major transformation to convert nondedicated reps to a specialized/dedicated U.S. salesforce could cause short-term disruption; company expects the program to span through 2027 with two-thirds of the transition still to be completed.
Pricing and Gross Margin Pressure
Q4 consolidated pricing was -50 basis points; guidance contemplates up to 100 basis points of pricing erosion in 2026. Management expects gross margin to step down to roughly 70%–71% in 2026 and full-year operating margin to be ~50 basis points lower vs 2025.
GAAP Earnings Impact from Charges
Reported GAAP diluted EPS for Q4 was $0.70 vs $1.20 prior year; decline driven by a one-time brand rationalization charge, workforce reduction restructuring charges and higher interest expense from Paragon 28 financing.
Higher Interest Expense and Integration Costs
Adjusted net interest and non-operating expenses were $71M higher year-over-year in Q4; 2026 adjusted net interest and other non-operating expenses expected around $295M, reflecting higher debt from Paragon 28 and higher interest rates.
International Fragility and Regional Headwinds
Management cited fragile international performance in recent quarters, expected Asia Pacific softness (including Japan biannual price decrease and China go-to-market reconfiguration), and ongoing tariff headwinds that have impacted margins and are expected to remain choppy.
Company Guidance
Zimmer Biomet guided 2026 to organic constant‑currency revenue growth of 1%–3% (growth roughly consistent quarter‑to‑quarter), adjusted EPS of $8.30–$8.45, and free cash flow growth of 8%–10% (with free cash flow conversion approaching ~80%); the outlook includes a ~100‑bp contribution from Paragon 28 to reported sales before it enters organic in April, an expected FX tailwind of ~50 bps to full‑year revenue (about +250 bps in Q1), up to 100 bps of pricing erosion, and assumes end‑market growth in line with 2025 while allowing for disruption from the U.S. salesforce transition and international go‑to‑market evolution. They expect full‑year operating margins to be down roughly 50 bps from 2025 (Q1 down ~100 bps yoy, then improving ~100 bps into Q2), adjusted net interest and other non‑operating expenses of ~ $295 million, an adjusted effective tax rate of ~18%, and diluted shares of about 194–195 million (reflecting a 2026 buyback program of up to $750 million; the board has authorized up to $1.5 billion of repurchases overall).Zimmer Biomet Holdings Financial Statement Overview
Summary
Steady revenue growth since 2021 and consistently solid operating/free cash flow support a healthy core profile. Offsetting this are signs of margin pressure (notably the lower reported 2025 gross margin versus prior years) and a re-leveraging trend with higher debt in the last two years, reducing financial flexibility if profitability softens.Income Statement
Revenue has grown steadily from $6.1B (2020) to $8.2B (2025), with positive growth in each year since 2021, supporting a solid top-line trajectory. Profitability has improved materially versus the 2020 loss, with net income reaching $705M in 2025, but earnings quality looks less consistent: net margin peaked in 2023 (~13.8%) and moderated in 2024 (~11.8%), while 2025 margin fields are not provided (despite positive net income). Gross margin remains strong overall, though 2025 gross margin (~56.8%) appears meaningfully lower than 2021–2024 (~71–72%), indicating possible cost pressure or mix changes that bear monitoring.72
Positive
Balance Sheet
The company maintains a sizable equity base (stockholders’ equity ~$12.7B in 2025) against total debt of ~$7.5B, implying moderate leverage for a large medical device business. Leverage improved from 2020 to 2023 (debt-to-equity fell from ~0.67 to ~0.46) but moved higher in 2024 (~0.50) and debt increased further in 2025, suggesting a re-leveraging trend. Returns on equity were healthy in 2023–2024 (~8.2% to ~7.2%), but 2025 ROE is not provided, limiting visibility into whether returns held up alongside higher debt.66
Positive
Cash Flow
Cash generation is consistently solid: operating cash flow has generally run around $1.3B–$1.7B (2022–2025), and free cash flow remains strong at $1.47B in 2025. However, momentum has been uneven—free cash flow declined in 2024 and again in 2025 (2025 free cash flow growth -8.0%), after a rebound in 2023. Where available, cash conversion is supportive (free cash flow was ~75%–83% of net income in 2022–2024), though key cash coverage metrics are not provided for 2025, reducing confidence in the most recent period’s cash-to-earnings relationship.70
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 8.23B | 7.68B | 7.39B | 6.94B | 6.83B |
| Gross Profit | 5.07B | 5.49B | 5.31B | 4.92B | 4.87B |
| EBITDA | 2.22B | 2.25B | 2.22B | 1.49B | 1.65B |
| Net Income | 705.20M | 903.80M | 1.02B | 231.40M | 401.60M |
Balance Sheet | |||||
| Total Assets | 23.09B | 21.37B | 21.50B | 21.07B | 23.46B |
| Cash, Cash Equivalents and Short-Term Investments | 591.90M | 525.50M | 415.80M | 375.70M | 378.10M |
| Total Debt | 7.52B | 6.20B | 5.77B | 5.70B | 7.07B |
| Total Liabilities | 10.39B | 8.89B | 9.01B | 9.04B | 10.79B |
| Stockholders Equity | 12.71B | 12.47B | 12.48B | 12.02B | 12.66B |
Cash Flow | |||||
| Free Cash Flow | 1.47B | 1.14B | 1.19B | 1.07B | 1.35B |
| Operating Cash Flow | 1.70B | 1.50B | 1.58B | 1.28B | 1.50B |
| Investing Cash Flow | -1.98B | -888.10M | -778.90M | -529.20M | -503.60M |
| Financing Cash Flow | 326.00M | -484.50M | -763.50M | -843.80M | -1.31B |
Zimmer Biomet Holdings Technical Analysis
Positive
99.49
Price Trends
91.63
Positive
93.37
Positive
94.95
Positive
Market Momentum
2.78
Negative
66.44
Neutral
64.78
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZBH, the sentiment is Positive. The current price of 99.49 is above the 20-day moving average (MA) of 94.95, above the 50-day MA of 91.63, and above the 200-day MA of 94.95, indicating a bullish trend. The MACD of 2.78 indicates Negative momentum. The RSI at 66.44 is Neutral, neither overbought nor oversold. The STOCH value of 64.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $50.63B | 48.26 | 10.43% | ― | 0.19% | 65.58% | |
72 Outperform | $148.11B | 46.13 | 15.08% | 0.95% | 10.95% | -18.32% | |
71 Outperform | $125.95B | 27.26 | 9.38% | 2.76% | 5.34% | 13.15% | |
69 Neutral | $14.94B | 32.64 | 9.20% | 2.28% | 5.78% | 61.52% | |
68 Neutral | $113.10B | 39.30 | 12.60% | ― | 21.62% | 54.80% | |
65 Neutral | $19.47B | 27.74 | 5.60% | 1.05% | 5.47% | -23.03% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
ZBH
Zimmer Biomet Holdings
99.49
-3.48
-3.38%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.