ZIMMER BIOMET HOLDINGS INC (ZBH) Stock Fundamental Analysis
NYSE:ZBH - US98956P1021 - Common Stock
105.06 USD
-1.73 (-1.62%)
105.06 USD
0 (0%)
Overall ZBH gets a fundamental rating of 5 out of 10. We evaluated ZBH against 185 industry peers in the Health Care Equipment & Supplies industry. While ZBH belongs to the best of the industry regarding profitability, there are concerns on its financial health. ZBH has a decent growth rate and is not valued too expensively. Finally ZBH also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
ZBH had positive earnings in the past year.
ZBH had a positive operating cash flow in the past year.
ZBH had positive earnings in 4 of the past 5 years.
In the past 5 years ZBH always reported a positive cash flow from operatings.
1.2 Ratios
With a decent Return On Assets value of 3.60%, ZBH is doing good in the industry, outperforming 77.84% of the companies in the same industry.
The Return On Equity of ZBH (6.57%) is better than 79.46% of its industry peers.
Looking at the Return On Invested Capital, with a value of 5.91%, ZBH is in the better half of the industry, outperforming 79.46% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ZBH is below the industry average of 8.44%.
| 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 has a better Profit Margin (10.51%) than 82.70% of its industry peers.
In the last couple of years the Profit Margin of ZBH has declined.
Looking at the Operating Margin, with a value of 19.26%, ZBH belongs to the top of the industry, outperforming 90.81% 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 (71.06%) than 81.62% 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 | 19.26% | ||
| 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ZBH is destroying value.
Compared to 1 year ago, ZBH has less shares outstanding
Compared to 5 years ago, ZBH has less shares outstanding
The debt/assets ratio for ZBH is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.61 indicates that ZBH is not a great score, but indicates only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.61, ZBH is in the better half of the industry, outperforming 66.49% of the companies in the same industry.
The Debt to FCF ratio of ZBH is 6.36, which is on the high side as it means it would take ZBH, 6.36 years of fcf income to pay off all of its debts.
ZBH has a Debt to FCF ratio of 6.36. This is in the better half of the industry: ZBH outperforms 77.84% of its industry peers.
ZBH has a Debt/Equity ratio of 0.54. This is a neutral value indicating ZBH is somewhat dependend on debt financing.
The Debt to Equity ratio of ZBH (0.54) is worse than 65.95% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.54 | ||
| Debt/FCF | 6.36 | ||
| Altman-Z | 2.61 |
ROIC/WACC0.79
WACC7.49%
2.3 Liquidity
ZBH has a Current Ratio of 1.87. This is a normal value and indicates that ZBH is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of ZBH (1.87) is worse than 67.57% of its industry peers.
A Quick Ratio of 0.96 indicates that ZBH may have some problems paying its short term obligations.
With a Quick ratio value of 0.96, ZBH is not doing good in the industry: 79.46% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.87 | ||
| Quick Ratio | 0.96 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 1.67% over the past year.
Measured over the past 5 years, ZBH shows a small growth in Earnings Per Share. The EPS has been growing by 0.33% on average per year.
Looking at the last year, ZBH shows a small growth in Revenue. The Revenue has grown by 4.11% in the last year.
ZBH shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -0.77% yearly.
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
Based on estimates for the next years, ZBH will show a small growth in Earnings Per Share. The EPS will grow by 6.10% on average per year.
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 3Y5.94%
Revenue Next 5Y4.71%
3.3 Evolution
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.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 13.25 indicates a correct valuation of ZBH.
Based on the Price/Earnings ratio, ZBH is valued cheaper than 89.73% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.17. ZBH is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 12.18, ZBH is valued correctly.
90.27% of the companies in the same industry are more expensive than ZBH, based on the Price/Forward Earnings ratio.
ZBH is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.78, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.25 | ||
| Fwd PE | 12.18 |
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 88.65% of the companies listed in the same industry.
ZBH's Price/Free Cash Flow ratio is rather cheap when compared to the industry. ZBH is cheaper than 89.19% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.48 | ||
| EV/EBITDA | 11.05 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ZBH does not grow enough to justify the current Price/Earnings ratio.
ZBH has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)4.55
PEG (5Y)40.37
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.
Compared to an average industry Dividend Yield of 1.74, ZBH pays a better dividend. On top of this ZBH pays more dividend than 93.51% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.34, 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 been paying a dividend for at least 10 years, so it has a reliable track record.
ZBH has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)0.19%
Div Incr Years0
Div Non Decr Years12
5.3 Sustainability
23.38% of the earnings are spent on dividend by ZBH. This is a low number and sustainable payout ratio.
The dividend of ZBH is growing, but earnings are growing more, so the dividend growth is sustainable.
DP23.38%
EPS Next 2Y3.84%
EPS Next 3Y5.23%
105.06
-1.73 (-1.62%)
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 Change1.66%
Market Cap20.81B
Analysts70.59
Price Target113.94 (8.45%)
Short Float %3%
Short Ratio3.13
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)3.08%
PT rev (3m)0.07%
EPS NQ rev (1m)3.23%
EPS NQ rev (3m)-1.78%
EPS NY rev (1m)2.29%
EPS NY rev (3m)2.1%
Revenue NQ rev (1m)0.75%
Revenue NQ rev (3m)5.86%
Revenue NY rev (1m)0.51%
Revenue NY rev (3m)0.63%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.25 | ||
| Fwd PE | 12.18 | ||
| P/S | 2.66 | ||
| P/FCF | 17.48 | ||
| P/OCF | 12.51 | ||
| P/B | 1.66 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.05 |
EPS(TTM)7.93
EY7.55%
EPS(NY)8.63
Fwd EY8.21%
FCF(TTM)6.01
FCFY5.72%
OCF(TTM)8.39
OCFY7.99%
SpS39.54
BVpS63.23
TBVpS-10.48
PEG (NY)4.55
PEG (5Y)40.37
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 | 2.61 |
F-Score5
WACC7.49%
ROIC/WACC0.79
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 3Y5.94%
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%