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Zimmer Biomet Holdings
(NYSE:ZBH)
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Rating:74Outperform
Price Target:
$110.00
▲(20.42% Upside)
Action:Reiterated
Date:08/06/26
The score is driven primarily by solid fundamentals—especially strong and improving free cash flow—alongside a supportive technical uptrend. The latest earnings call adds confidence via raised guidance and increased buybacks, though margin pressure, pricing erosion risk, and knee/China weakness temper upside. Valuation is the main drag given the ~24x P/E with a modest ~1% yield.
Positive Factors
Cash generation strength
Zimmer Biomet's free cash flow outpacing net income and meaningful YoY FCF and operating cash flow gains provide durable financial flexibility. Strong cash conversion supports continued R&D, capex, debt servicing, and sizable buybacks without depending on volatile external funding.
Negative Factors
Margin pressure from investments
Material margin compression driven by higher manufacturing and commercial investments is a structural headwind to profitability. If sustained, lower operating margins can reduce reinvestment capacity, weaken returns on capital, and compress long‑term free cash flow generation versus peers.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation strength
Zimmer Biomet's free cash flow outpacing net income and meaningful YoY FCF and operating cash flow gains provide durable financial flexibility. Strong cash conversion supports continued R&D, capex, debt servicing, and sizable buybacks without depending on volatile external funding.
Read all positive factors
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 (ZBH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$18.99B
Dividend Yield0.95%
Average Volume (3M)2.13M
Price to Earnings (P/E)24.4
Beta (1Y)0.50
Revenue Growth8.62%
EPS Growth0.09%
CountryUS
Employees17,000
SectorHealthcare
Sector Strength45
IndustryMedical - Devices
Share Statistics
EPS (TTM)4.13
Shares Outstanding190,737,690
10 Day Avg. Volume2,210,838
30 Day Avg. Volume2,130,373
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$105.29Price Target Upside15.26% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering17
EPS Forecast (FY)8.53
Revenue Forecast (FY)$8.60B
Zimmer Biomet Holdings Business Overview & Revenue Model
Company Description
Zimmer Biomet Holdings, Inc. engages in the design, manufacture, and marketing of orthopedic reconstructive products. The firm also offers sports medicine, biologics, extremities, and trauma products, spine, craniomaxillofacial, and thoracic produ...
How the Company Makes Money
Zimmer Biomet primarily makes money by selling orthopedic medical devices and related surgical products to healthcare providers (e.g., hospitals and ambulatory surgery centers) and distributors worldwide. Its core revenue stream comes from reconst...
Zimmer Biomet Holdings Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Positive
The call conveyed multiple strong operational and financial positives — revenue beat, raised guidance, robust cash generation, rapid technology and hip product adoption, successful Paragon integration and a sizable buyback — while acknowledging near-term headwinds including margin pressure from investment and manufacturing costs, pricing erosion risk, weakness in knees and China, and some supply constraints. Management framed 2026 as a transitional year with confidence that investments and go-to-market changes will improve execution and performance into 2027.Positive Updates
Revenue Beat and Organic Growth
Second quarter net sales of $2.177 billion, +4.8% reported and +4.0% organic constant currency growth; U.S. organic growth +4.6% and international +3.1%.
Negative Updates
Knee Performance Weakness
Knees up only +0.1% for the quarter with U.S. knee growth +1.4% offset by international knee decline -1.5%, heavily impacted by weakness in China and core emerging markets.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue Beat and Organic Growth
Second quarter net sales of $2.177 billion, +4.8% reported and +4.0% organic constant currency growth; U.S. organic growth +4.6% and international +3.1%.
Read all positive updates
Company Guidance
Zimmer Biomet raised its 2026 outlook, now forecasting full‑year organic constant‑currency revenue growth of 2.25%–3.25% (up from 1%–3%) and reported sales growth of 3.9%–4.9% (prior 2.5%–4.5%), with foreign exchange ~+50 bps to full‑year revenue (but ~‑50 bps headwind in Q3) and Paragon 28 now expected to contribute ~110 bps to reported sales (vs ~100 bps prior); the company assumes up to 100 bps of pricing erosion, increased adjusted EPS guidance to $8.47–$8.59 (from $8.40–$8.55), expects gross margin around 71% and operating margins to decline a little more than 50 bps (Q3 operating margin slightly down sequentially), anticipates net interest/other non‑operating expense of ~$295M and an adjusted tax rate of 18%, plans up to $1.0B of share repurchases (up $250M) leaving ~193M fully diluted shares, and continues to target free cash flow growth of 9%–11%.Zimmer Biomet Holdings Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
67
Positive
Cash Flow
82
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 8.51B | 8.23B | 7.68B | 7.39B | 6.94B | 6.83B |
| Gross Profit | 5.95B | 5.07B | 5.49B | 5.31B | 4.92B | 4.87B |
| EBITDA | 1.96B | 2.22B | 2.25B | 2.22B | 1.49B | 1.65B |
| Net Income | 806.80M | 705.20M | 903.80M | 1.02B | 231.40M | 401.60M |
Balance Sheet | ||||||
| Total Assets | 22.80B | 23.09B | 21.37B | 21.50B | 21.07B | 23.46B |
| Cash, Cash Equivalents and Short-Term Investments | 410.00M | 591.90M | 525.50M | 415.80M | 375.70M | 378.10M |
| Total Debt | 7.48B | 7.52B | 6.20B | 5.77B | 5.70B | 7.07B |
| Total Liabilities | 10.17B | 10.39B | 8.89B | 9.01B | 9.04B | 10.79B |
| Stockholders Equity | 12.62B | 12.70B | 12.47B | 12.48B | 12.02B | 12.66B |
Cash Flow | ||||||
| Free Cash Flow | 1.83B | 1.47B | 1.14B | 1.19B | 1.07B | 1.35B |
| Operating Cash Flow | 1.74B | 1.70B | 1.50B | 1.58B | 1.28B | 1.50B |
| Investing Cash Flow | -835.10M | -1.98B | -888.10M | -778.90M | -529.20M | -503.60M |
| Financing Cash Flow | -1.05B | 326.00M | -484.50M | -763.50M | -843.80M | -1.31B |
Zimmer Biomet Holdings Technical Analysis
Positive
91.35
Price Trends
91.08
Positive
89.17
Positive
90.53
Positive
Market Momentum
2.28
Negative
63.57
Neutral
63.77
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 91.35 is below the 20-day moving average (MA) of 94.52, above the 50-day MA of 91.08, and above the 200-day MA of 90.53, indicating a bullish trend. The MACD of 2.28 indicates Negative momentum. The RSI at 63.57 is Neutral, neither overbought nor oversold. The STOCH value of 63.77 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 32 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 |
|---|---|---|---|---|---|---|---|
74 Outperform | $18.99B | 24.37 | 6.36% | 1.05% | 8.62% | 0.09% | |
73 Outperform | $53.35B | 52.64 | 9.69% | ― | 14.55% | 15.09% | |
72 Outperform | $130.83B | 34.86 | 16.36% | 1.05% | 8.48% | 27.36% | |
71 Outperform | $12.52B | 19.51 | 12.25% | 2.56% | 5.26% | 31.02% | |
70 Outperform | $74.91B | 20.90 | 14.90% | ― | 13.53% | 46.29% | |
68 Neutral | $115.95B | 24.34 | 9.85% | 3.43% | 8.43% | 3.17% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
ZBH
Zimmer Biomet Holdings
100.65
-1.03
-1.01%
BSX
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EW
Edwards Lifesciences
91.60
13.34
17.05%
MDT
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91.27
1.18
1.31%
SNN
Smith & Nephew Snats
29.81
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-15.78%
SYK
Stryker
339.21
-38.85
-10.28%
Zimmer Biomet Holdings Corporate Events
Business Operations and StrategyFinancial DisclosuresRegulatory Filings and Compliance
Zimmer Biomet updates segment reporting and disclosures
Neutral
Aug 5, 2026
In the quarter ended March 31, 2026, Zimmer Biomet restructured responsibilities among senior leaders reporting to its chief operating decision maker, prompting changes in how segment operating profit data is presented. Results from the Foot and A...
Business Operations and StrategyPrivate Placements and Financing
Zimmer Biomet Expands Liquidity With New Credit Facilities
Positive
Jun 29, 2026
On June 26, 2026, Zimmer Biomet entered into a new $1.5 billion five-year unsecured revolving credit facility and a new $1.25 billion 364-day unsecured revolving credit facility with JPMorgan Chase as administrative agent, both for general corpora...
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
Zimmer Biomet Shareholders Reaffirm Board, Leadership and Oversight
Positive
May 27, 2026
At its annual meeting of shareholders held on May 22, 2026, Zimmer Biomet shareholders elected ten directors to one-year terms ending at the 2027 annual meeting, reaffirming the current board slate and leadership structure. Investors also ratified...
Business Operations and StrategyStock Buyback
Zimmer Biomet Expands 2026 Share Repurchase Program
Positive
May 12, 2026
On May 12, 2026, Zimmer Biomet announced it now expects to repurchase up to $1 billion of its common stock during fiscal 2026, raising its planned buybacks by $250 million compared with prior capital allocation assumptions. All purchases will be e...
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.