ZIMMER BIOMET HOLDINGS INC (ZBH)
US98956P1021 - Common Stock
We assign a fundamental rating of 6 out of 10 to ZBH. ZBH was compared to 192 industry peers in the Health Care Equipment & Supplies industry. While ZBH has a great profitability rating, there are some minor concerns on its financial health. ZBH has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year ZBH was profitable.
ZBH had a positive operating cash flow in the past year.
Of the past 5 years ZBH 4 years were profitable.
ZBH had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of ZBH (4.76%) is better than 83.33% of its industry peers.
With an excellent Return On Equity value of 8.20%, ZBH belongs to the best of the industry, outperforming 84.38% of the companies in the same industry.
ZBH's Return On Invested Capital of 6.65% is amongst the best of the industry. ZBH outperforms 83.85% of its industry peers.
ZBH had an Average Return On Invested Capital over the past 3 years of 5.54%. This is below the industry average of 8.50%.
The 3 year average ROIC (5.54%) for ZBH is below the current ROIC(6.65%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.76% | ||
| ROE | 8.2% | ||
| ROIC | 6.65% |
ROA(3y)2.52%
ROA(5y)2.32%
ROE(3y)4.43%
ROE(5y)4.26%
ROIC(3y)5.54%
ROIC(5y)4.94%
1.3 Margins
Looking at the Profit Margin, with a value of 13.85%, ZBH belongs to the top of the industry, outperforming 91.15% of the companies in the same industry.
Looking at the Operating Margin, with a value of 19.92%, ZBH belongs to the top of the industry, outperforming 93.23% of the companies in the same industry.
ZBH's Operating Margin has improved in the last couple of years.
ZBH has a better Gross Margin (71.82%) than 82.29% of its industry peers.
In the last couple of years the Gross Margin of ZBH has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.92% | ||
| PM (TTM) | 13.85% | ||
| GM | 71.82% |
OM growth 3Y23.17%
OM growth 5Y3.66%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y1%
GM growth 5Y0.04%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ZBH is destroying value.
ZBH has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, ZBH has more shares outstanding
Compared to 1 year ago, ZBH has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.98 indicates that ZBH is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of ZBH (2.98) is better than 66.15% of its industry peers.
The Debt to FCF ratio of ZBH is 6.46, which is on the high side as it means it would take ZBH, 6.46 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 6.46, ZBH is doing good in the industry, outperforming 79.17% of the companies in the same industry.
A Debt/Equity ratio of 0.39 indicates that ZBH is not too dependend on debt financing.
ZBH has a Debt to Equity ratio of 0.39. This is comparable to the rest of the industry: ZBH outperforms 40.10% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.39 | ||
| Debt/FCF | 6.46 | ||
| Altman-Z | 2.98 |
ROIC/WACC0.69
WACC9.59%
2.3 Liquidity
A Current Ratio of 1.61 indicates that ZBH should not have too much problems paying its short term obligations.
The Current ratio of ZBH (1.61) is worse than 81.25% of its industry peers.
ZBH has a Quick Ratio of 1.61. This is a bad value and indicates that ZBH is not financially healthy enough and could expect problems in meeting its short term obligations.
ZBH has a worse Quick ratio (0.78) than 90.10% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.61 | ||
| Quick Ratio | 0.78 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 9.72% over the past year.
Measured over the past years, ZBH shows a decrease in Earnings Per Share. The EPS has been decreasing by -0.21% on average per year.
The Revenue has been growing slightly by 6.55% in the past year.
ZBH shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -1.40% yearly.
EPS 1Y (TTM)9.72%
EPS 3Y10.06%
EPS 5Y-0.21%
EPS growth Q2Q17.02%
Revenue 1Y (TTM)6.55%
Revenue growth 3Y1.72%
Revenue growth 5Y-1.4%
Revenue growth Q2Q6.3%
3.2 Future
Based on estimates for the next years, ZBH will show a small growth in Earnings Per Share. The EPS will grow by 6.94% on average per year.
ZBH is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.87% yearly.
EPS Next Y7.63%
EPS Next 2Y7.7%
EPS Next 3Y7.74%
EPS Next 5Y6.94%
Revenue Next Year5.04%
Revenue Next 2Y4.88%
Revenue Next 3Y4.73%
Revenue Next 5Y4.87%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 16.03 indicates a correct valuation of ZBH.
Based on the Price/Earnings ratio, ZBH is valued cheaply inside the industry as 89.58% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 24.84, ZBH is valued a bit cheaper.
ZBH is valuated correctly with a Price/Forward Earnings ratio of 14.90.
ZBH's Price/Forward Earnings ratio is rather cheap when compared to the industry. ZBH is cheaper than 91.67% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.35. ZBH is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.03 | ||
| Fwd PE | 14.9 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ZBH indicates a rather cheap valuation: ZBH is cheaper than 91.67% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, ZBH is valued cheaper than 87.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.91 | ||
| EV/EBITDA | 12.32 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
ZBH has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.1
PEG (5Y)N/A
EPS Next 2Y7.7%
EPS Next 3Y7.74%
5. Dividend
5.1 Amount
With a yearly dividend of 0.80%, ZBH is not a good candidate for dividend investing.
ZBH's Dividend Yield is rather good when compared to the industry average which is at 1.69. ZBH pays more dividend than 92.19% of the companies in the same industry.
With a Dividend Yield of 0.80, ZBH pays less dividend than the S&P500 average, which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.8% |
5.2 History
The dividend of ZBH has a limited annual growth rate of 0.21%.
ZBH has been paying a dividend for at least 10 years, so it has a reliable track record.
ZBH has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)0.21%
Div Incr Years0
Div Non Decr Years11
5.3 Sustainability
ZBH pays out 19.62% of its income as dividend. This is a sustainable payout ratio.
ZBH's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP19.62%
EPS Next 2Y7.7%
EPS Next 3Y7.74%
ZIMMER BIOMET HOLDINGS INC
NYSE:ZBH (4/29/2024, 9:36:52 AM)
121.205
+1.86 (+1.55%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Equipment & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap24.90B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.8% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
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Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.03 | ||
| Fwd PE | 14.9 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2.1
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.76% | ||
| ROE | 8.2% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 19.92% | ||
| PM (TTM) | 13.85% | ||
| GM | 71.82% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.34
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.39 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.61 | ||
| Quick Ratio | 0.78 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)9.72%
EPS 3Y10.06%
EPS 5Y
EPS growth Q2Q
EPS Next Y7.63%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)6.55%
Revenue growth 3Y1.72%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y