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Zimmer Biomet Holdings Inc ZBH

Morningstar Rating
$125.51 +1.50 (1.21%)
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Company Report

Zimmer Biomet Earnings: Muted Large Joint Growth Keeps Our 2024 Projections Tempered

Zimmer Biomet posted fourth-quarter and full-year results that ran slightly ahead of our expectations on the top and bottom lines, but not enough to materially shift our fair value estimate. Additionally, we continue to hold tempered expectations for 2024, which fall slightly short of management’s outlook, as we expect utilization of the Rosa robot and penetration of the higher-margin cementless knees are unlikely to make a quantum leap this year but instead to increase steadily and more gradually over time. However, market skepticism about whether Zimmer Biomet can reach management’s 2024 goals seems to have translated into pressure on shares. Nonetheless, we saw little in the quarter to change our thinking on Zimmer Biomet’s wide economic moat.

Price vs Fair Value

ZBH is trading at a 28% discount.
Price
$125.51
Fair Value
$597.00
Uncertainty
Medium
1-Star Price
$822.14
5-Star Price
$118.90
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Zimmer Biomet has made impressive progress in placing its Rosa robots in hospitals and ambulatory surgical centers, paving the way for higher-margin implant pull through.

Bears

The scarcity of high-quality comparative effectiveness research data makes it more difficult for orthopedic companies to secure premium pricing at the same time payers and hospitals are raising the bar for cost-effectiveness.

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News

Trading Information

Previous Close Price
$124.01
Day Range
$122.49126.47
52-Week Range
$102.00149.25
Bid/Ask
$122.85 / $128.16
Market Cap
$25.74 Bil
Volume/Avg
1.7 Mil / 1.7 Mil

Key Statistics

Price/Earnings (Normalized)
16.60
Price/Sales
3.56
Dividend Yield (Trailing)
0.76%
Dividend Yield (Forward)
0.76%
Total Yield
3.45%

Company Profile

Zimmer Biomet designs, manufactures, and markets orthopedic reconstructive implants, as well as supplies and surgical equipment for orthopedic surgery. With the acquisitions of Centerpulse in 2003 and Biomet in 2015, Zimmer holds the leading share of the reconstructive market in the United States, Europe, and Japan. Roughly two thirds of total revenue is derived from sales of large joints, another quarter comes from extremities, trauma, sports medicine, and related surgical products. The firm spun out its dental and spine businesses in 2022.
Sector
Healthcare
Industry
Medical Devices
Stock Style Box
Mid Core
Total Number of Employees
18,000

Competitors

Valuation

Metric
ZBH
SNN
SYK
Price/Earnings (Normalized)
16.6016.0133.57
Price/Book Value
2.072.227.27
Price/Sales
3.562.096.66
Price/Cash Flow
13.3112.3232.42
Price/Earnings
ZBH
SNN
SYK

Financial Strength

Metric
ZBH
SNN
SYK
Quick Ratio
0.650.830.86
Current Ratio
1.612.191.58
Interest Coverage
6.302.8111.32
Quick Ratio
ZBH
SNN
SYK

Profitability

Metric
ZBH
SNN
SYK
Return on Assets (Normalized)
7.45%6.86%10.75%
Return on Equity (Normalized)
12.87%12.92%23.27%
Return on Invested Capital (Normalized)
9.78%9.28%14.37%
Return on Assets
ZBH
SNN
SYK
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