One-glance verdict
Undervalued
$153.01 our estimate vs market $92.44
Wall Street consensus: $107.57 (-29.7% lower than our fair-value estimate)
40% below our estimate, below the bear case
Fundamentals snapshot
Zimmer Biomet Holdings, Inc.
ZBH · NYQ · Healthcare · Medical Devices
Current price
$92.44
52-week range
$79.12 - $106.88
Market cap
$17.63B
Balance sheet
Watch
4.63x Stretched
Net debt $7.14B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 3.4% last year.
- Reward Free cash flow was positive in 10/10 years.
- Risk Net debt grew 30.2% over 3 years.
- Risk Insider ownership is only 0.2% (peer median: 0.4%).
What this company does
Zimmer Biomet Holdings, Inc.
Zimmer Biomet is a medical technology company that gets most of its revenue (the total money earned from sales) from making and selling artificial joints for knee and hip replacements. They also sell high-tech robotic systems that help surgeons place these implants more precisely during operations. Because an aging population often needs these procedures to stay mobile, there is a consistent demand for the company's products.
How the company got here
Zimmer Biomet's story begins with two separate companies, both founded in Warsaw, Indiana, which is known as the orthopedic capital of the world. Zimmer was started in 1927 to make aluminum splints, while Biomet was founded fifty years later in 1977. A major turning point came in 2015 when Zimmer acquired Biomet, creating the company we know today. More recently, the company has focused on its core business of helping with bone and joint problems by spinning off (separating into a new company) its spine and dental businesses in 2022. This allows them to concentrate on the larger markets for knee and hip replacements, while also investing in new technologies.
What it actually does
Zimmer Biomet is a medical technology company that creates and sells products to help people with bone, joint, and soft tissue injuries or disorders. Think of them as a company that makes replacement parts for the human body, like artificial hips and knees. They also make products for sports-related injuries, trauma, and reconstruction of the face and skull. Beyond just the physical implants, they develop robotic and digital technologies that help surgeons perform procedures with greater precision. Their customers are typically orthopedic surgeons, hospitals, and other healthcare providers who use these products to improve their patients' mobility and quality of life.
Knees
This is one of the company's largest and most important business areas. It involves designing and manufacturing artificial knee joints for people whose own knees are worn out or damaged, often due to arthritis. These products include systems for total knee replacement, partial knee replacement, and more complex revision surgeries for when a previous replacement needs to be fixed. Surgeons and hospitals purchase these implant systems to help patients regain movement and reduce pain. This segment is a major source of the company's revenue (the total money it brings in from sales).
Hips
Similar to the knee business, this segment focuses on creating and selling artificial hip joints. These are for patients who need a hip replacement, a common surgery for people with severe hip pain or fractures. The products include various components like stems that go into the thigh bone and cups that fit into the hip socket. This is another core part of Zimmer Biomet's business, contributing a significant portion of its overall sales and helping to build strong relationships with surgeons.
S.E.T. (Sports Medicine, Extremities, and Trauma)
This part of the company deals with a wider variety of products beyond just major joints. It includes devices for repairing sports injuries like torn ligaments, as well as products for smaller joints like the foot, ankle, and shoulder. It also provides solutions for trauma situations, such as plates and screws to fix broken bones. This segment is a key area of growth for the company as it looks to expand into faster-growing markets.
Technology and Data
This is a newer but increasingly important part of Zimmer Biomet's business. It includes a range of digital and robotic technologies designed to assist surgeons. A key product is the ROSA Robotics platform, which helps surgeons with the precise placement of knee and hip implants. The company is also building a connected ecosystem of technologies that collect and analyze data throughout a patient's surgical journey to help improve outcomes. This segment represents a strategic effort to be more than just an implant provider, but a partner in improving the entire surgical process.
What management is betting on now
The company's leadership is focused on a few key areas to drive future growth. A major priority is to expand the use of its ROSA Robotics and other digital technologies, believing this will make their implant business stronger and more attractive to surgeons. They are also actively looking to grow in markets that are expanding more quickly, such as sports medicine and foot and ankle surgery. Another key strategy is to increase their presence in ambulatory surgery centers (outpatient clinics where surgeries are performed), which is a growing trend in healthcare. Finally, the company plans to return a significant portion of its free cash flow (the cash left over after paying for operating expenses and capital expenditures) to shareholders through dividends (a portion of profits paid out to shareholders) and share buybacks (when a company buys its own stock to reduce the number of shares available).
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$351.20M
FY2024 Q4
$454.80M
FY2025 Q1
$338.20M
FY2025 Q2
$328.10M
FY2025 Q3
$363.70M
FY2025 Q4
$442.60M
FY2026 Q1
$323.10M
FY2026 Q2
$393.60M
Revenue
$2.18B
Net income
$198.30M
Diluted EPS
1.03
Operating cash flow
$447.80M
Free cash flow
$393.60M
Fetching…
Sources
Revenue
$2.09B
Net income
$238.10M
Diluted EPS
1.22
Operating cash flow
$359.40M
Free cash flow
$323.10M
Fetching…
Sources
Revenue
$2.24B
Net income
$139.40M
Diluted EPS
0.71
Operating cash flow
$517.40M
Free cash flow
$442.60M
Fetching…
Sources
Revenue
$2.00B
Net income
$230.90M
Diluted EPS
1.16
Operating cash flow
$418.70M
Free cash flow
$363.70M
Fetching…
Sources
Revenue
$2.08B
Net income
$152.80M
Diluted EPS
0.77
Operating cash flow
$378.20M
Free cash flow
$328.10M
Fetching…
Sources
Revenue
$1.91B
Net income
$182.00M
Diluted EPS
0.91
Operating cash flow
$382.80M
Free cash flow
$338.20M
Fetching…
Sources
Revenue
$2.02B
Net income
$239.50M
Diluted EPS
1.18
Operating cash flow
$506.30M
Free cash flow
$454.80M
Fetching…
Sources
Revenue
$1.82B
Net income
$249.10M
Diluted EPS
1.23
Operating cash flow
$395.70M
Free cash flow
$351.20M
Fetching…
Sources
Is it cheap or expensive?
Fair value $153.01 vs current price $92.44
Wall Street consensus is the average analyst price target: $107.57 (-29.7% lower than our fair-value estimate).
Our most-likely fair value is $153.01 a share — about 65.5% above today's price of $92.44, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Watch
Net debt $7.1B. Interest coverage 4.6x.
Net debt
$7.14B
Interest coverage
4.63x
Zimmer Biomet Holdings, Inc.'s profit covers its interest bill about 4.6 times over. which is weaker than most peers shown here.
Watch
Worse cushion
Baseline
Better cushion
ZBH
BASELINE
Zimmer Biomet Holdings, Inc.
Total debt $7.60B Interest coverage 4.63x This is the baseline the peer rows are being compared against.
Total debt $15.45B Interest coverage 8.33x +80% vs ZBH Carries about 1.8x more debt cushion than ZBH.
Total debt $49.04B Interest coverage 26.36x +469% vs ZBH Carries about 5.7x more debt cushion than ZBH.
Total debt $3.78B Interest coverage 4.79x +3% vs ZBH Has roughly the same debt cushion as ZBH.
Total debt $28.15B Interest coverage 9.55x +106% vs ZBH Carries about 2.1x more debt cushion than ZBH.
Total debt $111.91M Interest coverage 75.23x +1,524% vs ZBH Carries about 16.2x more debt cushion than ZBH.
What you should know
The case for and against ZBH
3 Rewards
2 Risks
Rewards
-
Revenue grew 3.4% last year.
-
Free cash flow was positive in 10/10 years.
-
Dividend yield is 1.0% with 15-year payout history.
Risks
-
Net debt grew 30.2% over 3 years.
-
Insider ownership is only 0.2% (peer median: 0.4%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
23.00x
Forward P/E
10.19x
P/B
1.40x
P/S
2.07x
EV/EBITDA
9.70x
PEG ratio
0.62x
Profitability
How much profit each dollar creates
Gross margin
69.9%
Operating margin
18.0%
Net margin
9.5%
ROE
6.4%
ROA
4.0%
Health
Liquidity and balance-sheet strength
Debt / equity
0.60x
Current ratio
1.69x
Quick ratio
0.74x
Total debt
$7.60B
Total cash
$464.50M
Growth
How the business has been compounding
Revenue TTM
$8.51B
Revenue 5Y CAGR
4.8%
EPS TTM
4.02
EPS 5Y CAGR
47.8%
Cash flow
How much cash the business throws off
Operating CF TTM
$1.74B
Free CF TTM
$1.47B
FCF margin
17.3%
Dividend
Shareholder payout
Yield
1.0%
Payout ratio
23.3%
Last ex-div date
2026-09-30