ZIMMER BIOMET HOLDINGS INC (NYSE:ZBH) is a prime example of a stock that offers more than what meets the eye in terms of fundamentals.

Our stock screening tool has pinpointed ZIMMER BIOMET HOLDINGS INC (NYSE:ZBH) as an undervalued stock option. ZBH retains a strong financial foundation and an attractive price tag. Let's delve into the specifics below.

What does the Valuation looks like for ZBH

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. ZBH boasts a 7 out of 10:

• ZBH's Price/Earnings ratio is rather cheap when compared to the industry. ZBH is cheaper than 90.48% of the companies in the same industry.
• ZBH's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 24.21.
• The Price/Forward Earnings ratio is 10.65, which indicates a very decent valuation of ZBH.
• Based on the Price/Forward Earnings ratio, ZBH is valued cheaper than 92.06% of the companies in the same industry.
• The average S&P500 Price/Forward Earnings ratio is at 20.44. ZBH is valued slightly cheaper when compared to this.
• 91.53% of the companies in the same industry are more expensive than ZBH, based on the Enterprise Value to EBITDA ratio.
• ZBH's Price/Free Cash Flow ratio is rather cheap when compared to the industry. ZBH is cheaper than 89.95% of the companies in the same industry.
• ZBH has an outstanding profitability rating, which may justify a higher PE ratio.

Exploring ZBH's Profitability

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of ZBH, the assigned 8 is noteworthy for profitability:

• The Return On Assets of ZBH (4.12%) is better than 81.48% of its industry peers.
• With an excellent Return On Equity value of 7.37%, ZBH belongs to the best of the industry, outperforming 82.01% of the companies in the same industry.
• The Return On Invested Capital of ZBH (5.99%) is better than 80.42% of its industry peers.
• The 3 year average ROIC (5.98%) for ZBH is below the current ROIC(5.99%), indicating increased profibility in the last year.
• ZBH has a better Profit Margin (11.86%) than 88.89% of its industry peers.
• ZBH has a Operating Margin of 19.59%. This is amongst the best in the industry. ZBH outperforms 93.12% of its industry peers.
• ZBH's Operating Margin has improved in the last couple of years.
• With an excellent Gross Margin value of 71.05%, ZBH belongs to the best of the industry, outperforming 80.95% of the companies in the same industry.

Health Analysis for ZBH

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. ZBH has received a 5 out of 10:

• ZBH has a better Altman-Z score (2.61) than 67.72% of its industry peers.
• Looking at the Debt to FCF ratio, with a value of 6.53, ZBH is in the better half of the industry, outperforming 78.31% of the companies in the same industry.
• ZBH has a Current Ratio of 2.44. This indicates that ZBH is financially healthy and has no problem in meeting its short term obligations.

Growth Analysis for ZBH

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of ZBH, the assigned 4 reflects its growth potential:

• The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
• When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

Check the latest full fundamental report of ZBH for a complete fundamental analysis.

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.