ZIMMER BIOMET HOLDINGS INC (ZBH) Stock Fundamental Analysis
NYSE:ZBH - New York Stock Exchange, Inc. - US98956P1021 - Common Stock - Currency: USD
Overall ZBH gets a fundamental rating of 6 out of 10. We evaluated ZBH against 187 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 may be a bit undervalued, certainly considering the very reasonable score on growth ZBH also has an excellent dividend rating. This makes ZBH very considerable for value and dividend investing!
1. Profitability
1.1 Basic Checks
In the past year ZBH was profitable.
ZBH had a positive operating cash flow in the past year.
ZBH had positive earnings in 4 of the past 5 years.
Each year in the past 5 years ZBH had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 4.12%, ZBH belongs to the top of the industry, outperforming 81.28% of the companies in the same industry.
ZBH has a Return On Equity of 7.37%. This is amongst the best in the industry. ZBH outperforms 80.75% of its industry peers.
ZBH's Return On Invested Capital of 5.99% is fine compared to the rest of the industry. ZBH outperforms 79.68% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ZBH is below the industry average of 8.28%.
The last Return On Invested Capital (5.99%) for ZBH is above the 3 year average (5.98%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.12% | ||
| ROE | 7.37% | ||
| ROIC | 5.99% |
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
The Profit Margin of ZBH (11.86%) is better than 88.24% of its industry peers.
ZBH's Profit Margin has declined in the last couple of years.
ZBH has a better Operating Margin (19.59%) than 91.98% of its industry peers.
ZBH's Operating Margin has improved in the last couple of years.
The Gross Margin of ZBH (71.05%) is better than 81.28% of its industry peers.
ZBH's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.59% | ||
| PM (TTM) | 11.86% | ||
| GM | 71.05% |
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
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.
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
ZBH has an Altman-Z score of 2.56. This is not the best score and indicates that ZBH is in the grey zone with still only limited risk for bankruptcy at the moment.
ZBH has a Altman-Z score of 2.56. This is in the better half of the industry: ZBH outperforms 63.64% of its industry peers.
The Debt to FCF ratio of ZBH is 6.53, which is on the high side as it means it would take ZBH, 6.53 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of ZBH (6.53) is better than 78.07% of its industry peers.
ZBH has a Debt/Equity ratio of 0.53. This is a neutral value indicating ZBH is somewhat dependend on debt financing.
ZBH has a Debt to Equity ratio of 0.53. This is in the lower half of the industry: ZBH underperforms 63.10% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 6.53 | ||
| Altman-Z | 2.56 |
ROIC/WACC0.82
WACC7.31%
2.3 Liquidity
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.
Looking at the Current ratio, with a value of 2.44, ZBH is in line with its industry, outperforming 45.45% of the companies in the same industry.
ZBH has a Quick Ratio of 1.46. This is a normal value and indicates that ZBH is financially healthy and should not expect problems in meeting its short term obligations.
ZBH's Quick ratio of 1.46 is in line compared to the rest of the industry. ZBH outperforms 40.64% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.44 | ||
| Quick Ratio | 1.46 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 3.42% 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 3.30% in the last year.
The Revenue has been decreasing by -0.77% on average over the past years.
EPS 1Y (TTM)3.42%
EPS 3Y2.77%
EPS 5Y0.33%
EPS Q2Q%-6.7%
Revenue 1Y (TTM)3.3%
Revenue growth 3Y3.99%
Revenue growth 5Y-0.77%
Sales Q2Q%1.05%
3.2 Future
ZBH is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.73% yearly.
ZBH is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.93% yearly.
EPS Next Y0.6%
EPS Next 2Y2.46%
EPS Next 3Y4.85%
EPS Next 5Y5.73%
Revenue Next Year6.7%
Revenue Next 2Y6.17%
Revenue Next 3Y5.61%
Revenue Next 5Y4.93%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 12.50, which indicates a correct valuation of ZBH.
Based on the Price/Earnings ratio, ZBH is valued cheaply inside the industry as 90.37% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of ZBH to the average of the S&P500 Index (26.99), we can say ZBH is valued rather cheaply.
The Price/Forward Earnings ratio is 11.71, which indicates a very decent valuation of ZBH.
90.37% of the companies in the same industry are more expensive than ZBH, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of ZBH to the average of the S&P500 Index (36.36), we can say ZBH is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.5 | ||
| Fwd PE | 11.71 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ZBH is valued cheaper than 90.37% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, ZBH is valued cheaply inside the industry as 88.77% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.69 | ||
| EV/EBITDA | 9.45 |
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 excellent profitability rating of ZBH may justify a higher PE ratio.
PEG (NY)20.7
PEG (5Y)38.08
EPS Next 2Y2.46%
EPS Next 3Y4.85%
5. Dividend
5.1 Amount
ZBH has a Yearly Dividend Yield of 1.00%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 1.90, ZBH pays a better dividend. On top of this ZBH pays more dividend than 93.58% of the companies listed in the same industry.
With a Dividend Yield of 1.00, ZBH pays less dividend than the S&P500 average, which is at 2.40.
| 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 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
21.28% of the earnings are spent on dividend by ZBH. This is a low number and sustainable payout ratio.
ZBH's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP21.28%
EPS Next 2Y2.46%
EPS Next 3Y4.85%
NYSE:ZBH (8/7/2025, 3:41:05 PM)
98.355
+7.2 (+7.9%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Equipment & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners95.46%
Inst Owner Change-1.35%
Ins Owners0.13%
Ins Owner Change13.5%
Market Cap19.46B
Analysts69.71
Price Target110.54 (12.39%)
Short Float %3.71%
Short Ratio3.64
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1% |
Yearly Dividend0.97
Dividend Growth(5Y)0.19%
DP21.28%
Div Incr Years0
Div Non Decr Years12
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.45%
Min EPS beat(2)-0.34%
Max EPS beat(2)1.25%
EPS beat(4)2
Avg EPS beat(4)0.07%
Min EPS beat(4)-0.7%
Max EPS beat(4)1.25%
EPS beat(8)5
Avg EPS beat(8)0.74%
EPS beat(12)9
Avg EPS beat(12)2.68%
EPS beat(16)12
Avg EPS beat(16)2.85%
Revenue beat(2)0
Avg Revenue beat(2)-0.39%
Min Revenue beat(2)-0.53%
Max Revenue beat(2)-0.26%
Revenue beat(4)1
Avg Revenue beat(4)-0.27%
Min Revenue beat(4)-0.92%
Max Revenue beat(4)0.62%
Revenue beat(8)3
Avg Revenue beat(8)-0.09%
Revenue beat(12)7
Avg Revenue beat(12)1%
Revenue beat(16)8
Avg Revenue beat(16)-1.56%
PT rev (1m)0.91%
PT rev (3m)-10.61%
EPS NQ rev (1m)-0.09%
EPS NQ rev (3m)-2.15%
EPS NY rev (1m)0.03%
EPS NY rev (3m)-2.97%
Revenue NQ rev (1m)-0.05%
Revenue NQ rev (3m)3.34%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)3.68%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.5 | ||
| Fwd PE | 11.71 | ||
| P/S | 2.53 | ||
| P/FCF | 17.69 | ||
| P/OCF | 11.77 | ||
| P/B | 1.57 | ||
| P/tB | N/A | ||
| EV/EBITDA | 9.45 |
EPS(TTM)7.87
EY8%
EPS(NY)8.4
Fwd EY8.54%
FCF(TTM)5.56
FCFY5.65%
OCF(TTM)8.36
OCFY8.5%
SpS38.91
BVpS62.65
TBVpS-5.37
PEG (NY)20.7
PEG (5Y)38.08
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.12% | ||
| ROE | 7.37% | ||
| ROCE | 7.58% | ||
| ROIC | 5.99% | ||
| ROICexc | 6.44% | ||
| ROICexgc | 23.6% | ||
| OM | 19.59% | ||
| PM (TTM) | 11.86% | ||
| GM | 71.05% | ||
| FCFM | 14.29% |
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 Turnover0.35
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 6.53 | ||
| Debt/EBITDA | 2.61 | ||
| Cap/Depr | 54.76% | ||
| Cap/Sales | 7.2% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 65.63% | ||
| Profit Quality | 120.41% | ||
| Current Ratio | 2.44 | ||
| Quick Ratio | 1.46 | ||
| Altman-Z | 2.56 |
F-Score5
WACC7.31%
ROIC/WACC0.82
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)3.42%
EPS 3Y2.77%
EPS 5Y0.33%
EPS Q2Q%-6.7%
EPS Next Y0.6%
EPS Next 2Y2.46%
EPS Next 3Y4.85%
EPS Next 5Y5.73%
Revenue 1Y (TTM)3.3%
Revenue growth 3Y3.99%
Revenue growth 5Y-0.77%
Sales Q2Q%1.05%
Revenue Next Year6.7%
Revenue Next 2Y6.17%
Revenue Next 3Y5.61%
Revenue Next 5Y4.93%
EBIT growth 1Y1.15%
EBIT growth 3Y13.78%
EBIT growth 5Y3.48%
EBIT Next Year33.07%
EBIT Next 3Y12.77%
EBIT Next 5Y10.26%
FCF growth 1Y26.08%
FCF growth 3Y-5.87%
FCF growth 5Y0.84%
OCF growth 1Y22.05%
OCF growth 3Y0%
OCF growth 5Y-1.11%