ZIMMER BIOMET HOLDINGS INC (ZBH) Stock Fundamental Analysis
USA - NYSE:ZBH - US98956P1021 - Common Stock
100.29 USD
-1.45 (-1.43%)
100.29 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to ZBH. ZBH was compared to 190 industry peers in the Health Care Equipment & Supplies industry. ZBH scores excellent on profitability, but there are concerns on its financial health. ZBH scores decently on growth, while it is valued quite cheap. This could make an interesting combination. Finally ZBH also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
ZBH had positive earnings in the past year.
In the past year ZBH had a positive cash flow from operations.
ZBH had positive earnings in 4 of the past 5 years.
ZBH had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ZBH's Return On Assets of 3.60% is fine compared to the rest of the industry. ZBH outperforms 78.42% of its industry peers.
With a decent Return On Equity value of 6.57%, ZBH is doing good in the industry, outperforming 80.00% of the companies in the same industry.
ZBH has a Return On Invested Capital of 5.91%. This is in the better half of the industry: ZBH outperforms 80.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ZBH is below the industry average of 8.43%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.6% | ||
| ROE | 6.57% | ||
| ROIC | 5.91% |
ROA(3y)3.36%
ROA(5y)2.25%
ROE(3y)5.79%
ROE(5y)3.88%
ROIC(3y)5.98%
ROIC(5y)4.96%
1.3 Margins
ZBH's Profit Margin of 10.51% is amongst the best of the industry. ZBH outperforms 83.16% of its industry peers.
In the last couple of years the Profit Margin of ZBH has declined.
ZBH's Operating Margin of 19.26% is amongst the best of the industry. ZBH outperforms 91.05% of its industry peers.
ZBH's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 71.06%, ZBH belongs to the best of the industry, outperforming 81.58% of the companies in the same industry.
ZBH's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.26% | ||
| PM (TTM) | 10.51% | ||
| GM | 71.06% |
OM growth 3Y9.41%
OM growth 5Y4.28%
PM growth 3Y26.01%
PM growth 5Y-3.65%
GM growth 3Y0.08%
GM growth 5Y0.05%
2. Health
2.1 Basic Checks
ZBH has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for ZBH has been reduced compared to 1 year ago.
ZBH has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, ZBH has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.53 indicates that ZBH is not a great score, but indicates only limited risk for bankruptcy at the moment.
ZBH has a Altman-Z score of 2.53. This is in the better half of the industry: ZBH outperforms 66.32% of its industry peers.
ZBH has a debt to FCF ratio of 6.36. This is a slightly negative value and a sign of low solvency as ZBH would need 6.36 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 6.36, ZBH is doing good in the industry, outperforming 77.89% of the companies in the same industry.
A Debt/Equity ratio of 0.54 indicates that ZBH is somewhat dependend on debt financing.
ZBH has a Debt to Equity ratio of 0.54. This is in the lower half of the industry: ZBH underperforms 64.74% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.54 | ||
| Debt/FCF | 6.36 | ||
| Altman-Z | 2.53 |
ROIC/WACC0.8
WACC7.37%
2.3 Liquidity
A Current Ratio of 1.87 indicates that ZBH should not have too much problems paying its short term obligations.
ZBH has a worse Current ratio (1.87) than 66.32% of its industry peers.
ZBH has a Quick Ratio of 1.87. 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's Quick ratio of 0.96 is on the low side compared to the rest of the industry. ZBH is outperformed by 77.89% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.87 | ||
| Quick Ratio | 0.96 |
3. Growth
3.1 Past
ZBH shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 1.67%.
The Earnings Per Share has been growing slightly by 0.33% on average over the past years.
ZBH shows a small growth in Revenue. In the last year, the Revenue has grown by 4.11%.
Measured over the past years, ZBH shows a decrease in Revenue. The Revenue has been decreasing by -0.77% on average per year.
EPS 1Y (TTM)1.67%
EPS 3Y2.77%
EPS 5Y0.33%
EPS Q2Q%2.99%
Revenue 1Y (TTM)4.11%
Revenue growth 3Y3.99%
Revenue growth 5Y-0.77%
Sales Q2Q%6.97%
3.2 Future
The Earnings Per Share is expected to grow by 6.10% on average over the next years.
The Revenue is expected to grow by 4.71% on average over the next years.
EPS Next Y2.91%
EPS Next 2Y3.84%
EPS Next 3Y5.23%
EPS Next 5Y6.1%
Revenue Next Year7.26%
Revenue Next 2Y6.59%
Revenue Next 3Y5.97%
Revenue Next 5Y4.71%
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 12.65 indicates a correct valuation of ZBH.
ZBH's Price/Earnings ratio is rather cheap when compared to the industry. ZBH is cheaper than 90.00% 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 27.41.
ZBH is valuated reasonably with a Price/Forward Earnings ratio of 11.63.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ZBH indicates a rather cheap valuation: ZBH is cheaper than 92.11% of the companies listed in the same industry.
ZBH is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.87, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.65 | ||
| Fwd PE | 11.63 |
4.2 Price Multiples
ZBH's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ZBH is cheaper than 89.47% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ZBH indicates a rather cheap valuation: ZBH is cheaper than 88.95% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.69 | ||
| EV/EBITDA | 10.55 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of ZBH may justify a higher PE ratio.
PEG (NY)4.34
PEG (5Y)38.53
EPS Next 2Y3.84%
EPS Next 3Y5.23%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.00%, ZBH has a reasonable but not impressive dividend return.
ZBH's Dividend Yield is rather good when compared to the industry average which is at 1.74. ZBH pays more dividend than 93.68% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, ZBH's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1% |
5.2 History
The dividend of ZBH has a limited annual growth rate of 0.19%.
ZBH has paid a dividend for at least 10 years, which is 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)0.19%
Div Incr Years0
Div Non Decr Years12
5.3 Sustainability
ZBH pays out 23.38% 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.
DP23.38%
EPS Next 2Y3.84%
EPS Next 3Y5.23%
100.29
-1.45 (-1.43%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Equipment & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners98.01%
Inst Owner Change3.09%
Ins Owners0.13%
Ins Owner Change-0.37%
Market Cap19.87B
Analysts70.59
Price Target114.12 (13.79%)
Short Float %2.94%
Short Ratio3.62
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1% |
Yearly Dividend0.97
Dividend Growth(5Y)0.19%
DP23.38%
Div Incr Years0
Div Non Decr Years12
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.28%
Min EPS beat(2)1.25%
Max EPS beat(2)3.32%
EPS beat(4)2
Avg EPS beat(4)0.88%
Min EPS beat(4)-0.7%
Max EPS beat(4)3.32%
EPS beat(8)6
Avg EPS beat(8)1.21%
EPS beat(12)9
Avg EPS beat(12)2.16%
EPS beat(16)12
Avg EPS beat(16)3.02%
Revenue beat(2)1
Avg Revenue beat(2)-0.02%
Min Revenue beat(2)-0.26%
Max Revenue beat(2)0.21%
Revenue beat(4)2
Avg Revenue beat(4)0.01%
Min Revenue beat(4)-0.53%
Max Revenue beat(4)0.62%
Revenue beat(8)3
Avg Revenue beat(8)-0.24%
Revenue beat(12)7
Avg Revenue beat(12)0.8%
Revenue beat(16)9
Avg Revenue beat(16)-0.81%
PT rev (1m)3.23%
PT rev (3m)4.17%
EPS NQ rev (1m)0.02%
EPS NQ rev (3m)3.46%
EPS NY rev (1m)0%
EPS NY rev (3m)2.33%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.75%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.51%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.65 | ||
| Fwd PE | 11.63 | ||
| P/S | 2.54 | ||
| P/FCF | 16.69 | ||
| P/OCF | 11.95 | ||
| P/B | 1.59 | ||
| P/tB | N/A | ||
| EV/EBITDA | 10.55 |
EPS(TTM)7.93
EY7.91%
EPS(NY)8.63
Fwd EY8.6%
FCF(TTM)6.01
FCFY5.99%
OCF(TTM)8.39
OCFY8.37%
SpS39.54
BVpS63.23
TBVpS-10.48
PEG (NY)4.34
PEG (5Y)38.53
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.6% | ||
| ROE | 6.57% | ||
| ROCE | 7.48% | ||
| ROIC | 5.91% | ||
| ROICexc | 6.08% | ||
| ROICexgc | 23.79% | ||
| OM | 19.26% | ||
| PM (TTM) | 10.51% | ||
| GM | 71.06% | ||
| FCFM | 15.2% |
ROA(3y)3.36%
ROA(5y)2.25%
ROE(3y)5.79%
ROE(5y)3.88%
ROIC(3y)5.98%
ROIC(5y)4.96%
ROICexc(3y)6.12%
ROICexc(5y)5.09%
ROICexgc(3y)23.89%
ROICexgc(5y)20.99%
ROCE(3y)7.57%
ROCE(5y)6.28%
ROICexcg growth 3Y6.94%
ROICexcg growth 5Y-1.82%
ROICexc growth 3Y16.05%
ROICexc growth 5Y5.83%
OM growth 3Y9.41%
OM growth 5Y4.28%
PM growth 3Y26.01%
PM growth 5Y-3.65%
GM growth 3Y0.08%
GM growth 5Y0.05%
F-Score5
Asset Turnover0.34
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.54 | ||
| Debt/FCF | 6.36 | ||
| Debt/EBITDA | 2.65 | ||
| Cap/Depr | 45.39% | ||
| Cap/Sales | 6.03% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 65.24% | ||
| Profit Quality | 144.6% | ||
| Current Ratio | 1.87 | ||
| Quick Ratio | 0.96 | ||
| Altman-Z | 2.53 |
F-Score5
WACC7.37%
ROIC/WACC0.8
Cap/Depr(3y)60.17%
Cap/Depr(5y)52.93%
Cap/Sales(3y)7.84%
Cap/Sales(5y)7.09%
Profit Quality(3y)183.11%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)1.67%
EPS 3Y2.77%
EPS 5Y0.33%
EPS Q2Q%2.99%
EPS Next Y2.91%
EPS Next 2Y3.84%
EPS Next 3Y5.23%
EPS Next 5Y6.1%
Revenue 1Y (TTM)4.11%
Revenue growth 3Y3.99%
Revenue growth 5Y-0.77%
Sales Q2Q%6.97%
Revenue Next Year7.26%
Revenue Next 2Y6.59%
Revenue Next 3Y5.97%
Revenue Next 5Y4.71%
EBIT growth 1Y-1.58%
EBIT growth 3Y13.78%
EBIT growth 5Y3.48%
EBIT Next Year33.53%
EBIT Next 3Y12.92%
EBIT Next 5Y9.77%
FCF growth 1Y66.12%
FCF growth 3Y-5.87%
FCF growth 5Y0.84%
OCF growth 1Y23.13%
OCF growth 3Y0%
OCF growth 5Y-1.11%