Zimmer Biomet Holdings (ZBH) AI Stock Analysis

• Market Cap: $22.37B
• Dividend Yield: 0.85%
• Average Volume (3M): 1.81M
• Price to Earnings (P/E): 25.4
• Beta (1Y): 0.62
• Revenue Growth: 3.84%
• EPS Growth: -9.29%
• Country: US
• Employees: 17,000
• Sector: Healthcare
• Sector Strength: 78
• Industry: Medical - Devices
• EPS (TTM): 4.44
• Shares Outstanding: 199,063,170
• 10 Day Avg. Volume: 1,470,752
• 30 Day Avg. Volume: 1,806,989
• PEG Ratio: 0.16
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.87
• Price to Cash Flow (P/CF): 10.90
• P/FCF Ratio: 9.90
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $121.35
• Price Target Upside: 7.71% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 19

Zimmer Biomet's stock demonstrates a stable and positive outlook, driven by consistent revenue growth, strategic acquisitions, and positive technical indicators. However, challenges with profitability and currency headwinds present risks. The fair valuation and future growth prospects offer a balanced investment opportunity.

Positive Factors

Market Position

ZBH has a considerable head start in the cementless knee market due to the PMA pathway.

Product Innovation

ZBH sounds confident in its 'more prudent' 2025 guidance with a healthy ortho market and new product launches.

Strategic Acquisitions

The acquisition being immediately growth accretive helps ZBH leverage its business further to higher-growth end markets/segments.

Negative Factors

Competitive Performance

ZBH's 4Q results largely matched expectations, though the US Ortho performance lagged a key competitor (SYK).

Earnings Dilution

ZBH’s acceleration of growth through diversification is dilutive to earnings and will take time.

Earnings Expectations

Initial 2025 guidance for adjusted EPS growth is below consensus expectations.

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 demonstrates stability in its operations with consistent revenue growth and a robust balance sheet. However, recent profitability challenges and lack of free cash flow data present potential risks. The company's financials indicate a need for improved earnings and cash flow visibility to sustain and enhance its financial health.

Income Statement

Zimmer Biomet Holdings shows a moderate financial performance with stable revenue growth and competitive profit margins. The gross profit margin for the latest annual data is approximately 71.8%, reflecting strong cost management. However, there is a notable decline in EBIT and EBITDA margins in the most recent year due to zero reported figures, impacting overall profitability. Revenue growth from 2022 to 2023 was healthy at 6.54%, indicating positive business momentum.

Balance Sheet

The company maintains a solid balance sheet with a debt-to-equity ratio of approximately 0.48, indicating a manageable level of leverage. However, the equity ratio stands at 58.0%, showcasing a strong capital structure but slightly declining from prior years. Return on Equity (ROE) is historically strong, but recent data shows a decline due to net income pressures.

Cash Flow

Cash flow analysis reveals strengths in maintaining positive free cash flow historically, but the latest year shows no reported free cash flow, indicating operational challenges. The operating cash flow to net income ratio in 2023 was 1.54, suggesting efficient cash generation relative to net income. However, the absence of current free cash flow metrics limits a comprehensive assessment.

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

Zimmer Biomet Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 112.66
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 112.66 is above the 20-day moving average (MA) of 110.56, above the 50-day MA of 107.37, and above the 200-day MA of 107.40, indicating a bullish trend. The MACD of 1.75 indicates Negative momentum. The RSI at 59.87 is Neutral, neither overbought nor oversold. The STOCH value of 71.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ZBH.

Zimmer Biomet Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SNN	78 Outperform	$12.35B	29.60	7.82%	2.58%	4.58%	55.99%
BSX	78 Outperform	$145.69B	78.96	9.03%	―	17.60%	16.84%
SYK	78 Outperform	$142.48B	48.09	15.26%	0.89%	10.23%	-5.74%
ZBH	73 Outperform	$22.37B	25.35	7.24%	0.85%	3.84%	-9.29%
GMED	69 Neutral	$11.74B	101.42	2.52%	―	60.62%	-35.88%
SSKN	51 Neutral	$11.14M	―	-114.22%	―	0.61%	16.43%
Sector *	48 Neutral	$6.86B	1.11	-50.22%	2.47%	16.71%	1.53%

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.

Zimmer Biomet to Acquire Paragon 28 for $1.2 Billion

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.