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 5 out of 10. We evaluated ZBH against 190 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. A decent growth rate in combination with a cheap valuation! Better keep an eye on ZBH.
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.
ZBH had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 4.23%, ZBH is in the better half of the industry, outperforming 79.79% of the companies in the same industry.
ZBH has a Return On Equity of 7.24%. This is amongst the best in the industry. ZBH outperforms 80.85% of its industry peers.
ZBH has a better Return On Invested Capital (6.57%) than 82.98% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ZBH is below the industry average of 8.19%.
The 3 year average ROIC (6.01%) for ZBH is below the current ROIC(6.57%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.23% | ||
| ROE | 7.24% | ||
| ROIC | 6.57% |
ROA(3y)3.36%
ROA(5y)2.25%
ROE(3y)5.79%
ROE(5y)3.88%
ROIC(3y)6.01%
ROIC(5y)4.98%
1.3 Margins
ZBH's Profit Margin of 11.77% is amongst the best of the industry. ZBH outperforms 88.83% of its industry peers.
ZBH's Profit Margin has declined in the last couple of years.
ZBH has a better Operating Margin (20.48%) than 93.09% of its industry peers.
ZBH's Operating Margin has improved in the last couple of years.
ZBH's Gross Margin of 71.46% is amongst the best of the industry. ZBH outperforms 82.45% of its industry peers.
ZBH's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.48% | ||
| PM (TTM) | 11.77% | ||
| GM | 71.46% |
OM growth 3Y10%
OM growth 5Y4.62%
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.
Compared to 5 years ago, ZBH has less shares outstanding
ZBH has a worse debt/assets ratio than last year.
2.2 Solvency
ZBH has a debt to FCF ratio of 6.88. This is a slightly negative value and a sign of low solvency as ZBH would need 6.88 years to pay back of all of its debts.
The Debt to FCF ratio of ZBH (6.88) is better than 75.00% of its industry peers.
A Debt/Equity ratio of 0.43 indicates that ZBH is not too dependend on debt financing.
ZBH has a Debt to Equity ratio of 0.43. This is comparable to the rest of the industry: ZBH outperforms 42.02% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.43 | ||
| Debt/FCF | 6.88 | ||
| Altman-Z | N/A |
ROIC/WACC0.77
WACC8.53%
2.3 Liquidity
A Current Ratio of 1.91 indicates that ZBH should not have too much problems paying its short term obligations.
ZBH has a worse Current ratio (1.91) than 68.62% of its industry peers.
ZBH has a Quick Ratio of 1.91. 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 has a worse Quick ratio (0.99) than 78.72% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.91 | ||
| Quick Ratio | 0.99 |
3. Growth
3.1 Past
ZBH shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 5.82%.
The Earnings Per Share has been growing slightly by 0.33% on average over the past years.
Looking at the last year, ZBH shows a small growth in Revenue. The Revenue has grown by 3.84% in the last year.
The Revenue has been decreasing by -0.77% on average over the past years.
EPS 1Y (TTM)5.82%
EPS 3Y2.77%
EPS 5Y0.33%
EPS Q2Q%5%
Revenue 1Y (TTM)3.84%
Revenue growth 3Y3.99%
Revenue growth 5Y-0.77%
Sales Q2Q%4.28%
3.2 Future
The Earnings Per Share is expected to grow by 7.80% on average over the next years.
ZBH is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.66% yearly.
EPS Next Y4.14%
EPS Next 2Y5.84%
EPS Next 3Y6.65%
EPS Next 5Y7.8%
Revenue Next Year4.44%
Revenue Next 2Y4.51%
Revenue Next 3Y4.4%
Revenue Next 5Y4.66%
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
The Price/Earnings ratio is 13.10, which indicates a correct valuation of ZBH.
ZBH's Price/Earnings ratio is rather cheap when compared to the industry. ZBH is cheaper than 94.15% 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 29.63.
Based on the Price/Forward Earnings ratio of 12.58, the valuation of ZBH can be described as correct.
94.68% of the companies in the same industry are more expensive than ZBH, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.68, ZBH is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.1 | ||
| Fwd PE | 12.58 |
4.2 Price Multiples
90.96% of the companies in the same industry are more expensive than ZBH, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, ZBH is valued cheaper than 87.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.13 | ||
| EV/EBITDA | 10.24 |
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.
The excellent profitability rating of ZBH may justify a higher PE ratio.
PEG (NY)3.17
PEG (5Y)39.93
EPS Next 2Y5.84%
EPS Next 3Y6.65%
5. Dividend
5.1 Amount
ZBH has a yearly dividend return of 0.93%, which is pretty low.
Compared to an average industry Dividend Yield of 1.67, ZBH pays a better dividend. On top of this ZBH pays more dividend than 93.62% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.27, ZBH's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.93% |
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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)0.19%
Div Incr Years0
Div Non Decr Years11
5.3 Sustainability
ZBH pays out 21.69% 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.
DP21.69%
EPS Next 2Y5.84%
EPS Next 3Y6.65%
104.83
+1.2 (+1.16%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Equipment & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners93.34%
Inst Owner Change-0.5%
Ins Owners0.08%
Ins Owner Change1.36%
Market Cap20.87B
Analysts70.29
Price Target123.5 (17.81%)
Short Float %3.73%
Short Ratio4.25
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.93% |
Yearly Dividend0.97
Dividend Growth(5Y)0.19%
DP21.69%
Div Incr Years0
Div Non Decr Years11
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-0.52%
Min EPS beat(2)-0.7%
Max EPS beat(2)-0.34%
EPS beat(4)2
Avg EPS beat(4)0.44%
Min EPS beat(4)-0.7%
Max EPS beat(4)2.75%
EPS beat(8)5
Avg EPS beat(8)2.36%
EPS beat(12)9
Avg EPS beat(12)3.67%
EPS beat(16)12
Avg EPS beat(16)3.44%
Revenue beat(2)1
Avg Revenue beat(2)0.04%
Min Revenue beat(2)-0.53%
Max Revenue beat(2)0.62%
Revenue beat(4)2
Avg Revenue beat(4)-0.19%
Min Revenue beat(4)-0.92%
Max Revenue beat(4)0.62%
Revenue beat(8)4
Avg Revenue beat(8)0.74%
Revenue beat(12)8
Avg Revenue beat(12)1.34%
Revenue beat(16)9
Avg Revenue beat(16)-1.29%
PT rev (1m)0.32%
PT rev (3m)0.9%
EPS NQ rev (1m)-13.41%
EPS NQ rev (3m)-13.13%
EPS NY rev (1m)-3.95%
EPS NY rev (3m)-4.05%
Revenue NQ rev (1m)-4.01%
Revenue NQ rev (3m)-4.3%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.19%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.1 | ||
| Fwd PE | 12.58 | ||
| P/S | 2.72 | ||
| P/FCF | 23.13 | ||
| P/OCF | 13.92 | ||
| P/B | 1.67 | ||
| P/tB | N/A | ||
| EV/EBITDA | 10.24 |
EPS(TTM)8
EY7.63%
EPS(NY)8.33
Fwd EY7.95%
FCF(TTM)4.53
FCFY4.32%
OCF(TTM)7.53
OCFY7.18%
SpS38.57
BVpS62.67
TBVpS-5.39
PEG (NY)3.17
PEG (5Y)39.93
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.23% | ||
| ROE | 7.24% | ||
| ROCE | 8.31% | ||
| ROIC | 6.57% | ||
| ROICexc | 6.76% | ||
| ROICexgc | 25.67% | ||
| OM | 20.48% | ||
| PM (TTM) | 11.77% | ||
| GM | 71.46% | ||
| FCFM | 11.75% |
ROA(3y)3.36%
ROA(5y)2.25%
ROE(3y)5.79%
ROE(5y)3.88%
ROIC(3y)6.01%
ROIC(5y)4.98%
ROICexc(3y)6.16%
ROICexc(5y)5.11%
ROICexgc(3y)24.03%
ROICexgc(5y)21.08%
ROCE(3y)7.61%
ROCE(5y)6.31%
ROICexcg growth 3Y7.52%
ROICexcg growth 5Y-1.5%
ROICexc growth 3Y16.68%
ROICexc growth 5Y6.18%
OM growth 3Y10%
OM growth 5Y4.62%
PM growth 3Y26.01%
PM growth 5Y-3.65%
GM growth 3Y0.08%
GM growth 5Y0.05%
F-Score6
Asset Turnover0.36
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.43 | ||
| Debt/FCF | 6.88 | ||
| Debt/EBITDA | 2.08 | ||
| Cap/Depr | 59.93% | ||
| Cap/Sales | 7.78% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 58.37% | ||
| Profit Quality | 99.85% | ||
| Current Ratio | 1.91 | ||
| Quick Ratio | 0.99 | ||
| Altman-Z | N/A |
F-Score6
WACC8.53%
ROIC/WACC0.77
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)5.82%
EPS 3Y2.77%
EPS 5Y0.33%
EPS Q2Q%5%
EPS Next Y4.14%
EPS Next 2Y5.84%
EPS Next 3Y6.65%
EPS Next 5Y7.8%
Revenue 1Y (TTM)3.84%
Revenue growth 3Y3.99%
Revenue growth 5Y-0.77%
Sales Q2Q%4.28%
Revenue Next Year4.44%
Revenue Next 2Y4.51%
Revenue Next 3Y4.4%
Revenue Next 5Y4.66%
EBIT growth 1Y6.76%
EBIT growth 3Y14.4%
EBIT growth 5Y3.82%
EBIT Next Year34.27%
EBIT Next 3Y12.31%
EBIT Next 5Y10.34%
FCF growth 1Y1.11%
FCF growth 3Y-5.87%
FCF growth 5Y0.84%
OCF growth 1Y-5.2%
OCF growth 3Y0%
OCF growth 5Y-1.11%