ZIMMER BIOMET HOLDINGS INC (ZBH) Stock Fundamental Analysis
NYSE:ZBH - New York Stock Exchange, Inc. - US98956P1021 - Common Stock - Currency: USD
ZBH gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 190 industry peers in the Health Care Equipment & Supplies industry. ZBH has an excellent profitability rating, but there are some minor concerns on its financial health. ZBH is valued quite cheap, while showing a decent growth score. This is a good combination!
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 belongs to the top of the industry, outperforming 81.05% of the companies in the same industry.
ZBH has a Return On Equity of 7.25%. This is amongst the best in the industry. ZBH outperforms 80.53% of its industry peers.
ZBH's Return On Invested Capital of 6.51% is amongst the best of the industry. ZBH outperforms 82.63% of its industry peers.
ZBH had an Average Return On Invested Capital over the past 3 years of 5.98%. This is in line with the industry average of 7.68%.
The 3 year average ROIC (5.98%) for ZBH is below the current ROIC(6.51%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.23% | ||
| ROE | 7.25% | ||
| ROIC | 6.51% |
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's Profit Margin of 11.77% is amongst the best of the industry. ZBH outperforms 89.47% of its industry peers.
In the last couple of years the Profit Margin of ZBH has declined.
ZBH's Operating Margin of 20.30% is amongst the best of the industry. ZBH outperforms 93.16% of its industry peers.
ZBH's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 71.46%, ZBH belongs to the best of the industry, outperforming 81.05% of the companies in the same industry.
ZBH's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.3% | ||
| PM (TTM) | 11.77% | ||
| GM | 71.46% |
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.
ZBH has less shares outstanding than it did 1 year ago.
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 2.77 indicates that ZBH is not a great score, but indicates only limited risk for bankruptcy at the moment.
ZBH has a Altman-Z score of 2.77. This is in the better half of the industry: ZBH outperforms 69.47% of its industry peers.
The Debt to FCF ratio of ZBH is 6.88, which is on the high side as it means it would take ZBH, 6.88 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 6.88, ZBH is doing good in the industry, outperforming 76.84% of the companies in the same industry.
A Debt/Equity ratio of 0.43 indicates that ZBH is not too dependend on debt financing.
The Debt to Equity ratio of ZBH (0.43) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.43 | ||
| Debt/FCF | 6.88 | ||
| Altman-Z | 2.77 |
ROIC/WACC0.79
WACC8.28%
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 66.84% 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.
The Quick ratio of ZBH (0.99) is worse than 75.26% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.91 | ||
| Quick Ratio | 0.99 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 5.82% over the past year.
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
Based on estimates for the next years, ZBH will show a small growth in Earnings Per Share. The EPS will grow by 7.76% on average per year.
The Revenue is expected to grow by 4.62% on average over the next years.
EPS Next Y3.61%
EPS Next 2Y5.71%
EPS Next 3Y6.66%
EPS Next 5Y7.76%
Revenue Next Year2.92%
Revenue Next 2Y3.83%
Revenue Next 3Y3.86%
Revenue Next 5Y4.62%
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
With a Price/Earnings ratio of 12.24, ZBH is valued correctly.
ZBH's Price/Earnings ratio is rather cheap when compared to the industry. ZBH is cheaper than 90.53% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.29. ZBH is valued rather cheaply when compared to this.
Based on the Price/Forward Earnings ratio of 11.81, the valuation of ZBH can be described as reasonable.
Based on the Price/Forward Earnings ratio, ZBH is valued cheaply inside the industry as 90.00% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 21.08. ZBH is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.24 | ||
| Fwd PE | 11.81 |
4.2 Price Multiples
90.00% of the companies in the same industry are more expensive than ZBH, based on the Enterprise Value to EBITDA ratio.
85.79% of the companies in the same industry are more expensive than ZBH, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.6 | ||
| EV/EBITDA | 9.85 |
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)3.39
PEG (5Y)37.29
EPS Next 2Y5.71%
EPS Next 3Y6.66%
5. Dividend
5.1 Amount
ZBH has a yearly dividend return of 0.98%, which is pretty low.
Compared to an average industry Dividend Yield of 1.94, ZBH pays a better dividend. On top of this ZBH pays more dividend than 91.58% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.57, ZBH's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.98% |
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 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 Years11
5.3 Sustainability
ZBH pays out 21.69% of its income as dividend. This is a sustainable payout ratio.
The dividend of ZBH is growing, but earnings are growing more, so the dividend growth is sustainable.
DP21.69%
EPS Next 2Y5.71%
EPS Next 3Y6.66%
97.92
+0.98 (+1.01%)
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 Change0%
Ins Owners0.08%
Ins Owner Change14.61%
Market Cap19.37B
Analysts70.29
Price Target123.38 (26%)
Short Float %3.55%
Short Ratio3.7
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.98% |
Yearly Dividend0.97
Dividend Growth(5Y)0.19%
DP21.69%
Div Incr Years0
Div Non Decr Years11
Ex-Date
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)-0.1%
PT rev (3m)-2.48%
EPS NQ rev (1m)0.04%
EPS NQ rev (3m)-13.92%
EPS NY rev (1m)0%
EPS NY rev (3m)-4.43%
Revenue NQ rev (1m)0.05%
Revenue NQ rev (3m)-3.96%
Revenue NY rev (1m)0.14%
Revenue NY rev (3m)-1.46%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.24 | ||
| Fwd PE | 11.81 | ||
| P/S | 2.54 | ||
| P/FCF | 21.6 | ||
| P/OCF | 13 | ||
| P/B | 1.56 | ||
| P/tB | N/A | ||
| EV/EBITDA | 9.85 |
EPS(TTM)8
EY8.17%
EPS(NY)8.29
Fwd EY8.46%
FCF(TTM)4.53
FCFY4.63%
OCF(TTM)7.53
OCFY7.69%
SpS38.57
BVpS62.63
TBVpS-5.43
PEG (NY)3.39
PEG (5Y)37.29
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.23% | ||
| ROE | 7.25% | ||
| ROCE | 8.24% | ||
| ROIC | 6.51% | ||
| ROICexc | 6.7% | ||
| ROICexgc | 25.45% | ||
| OM | 20.3% | ||
| 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)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-Score6
Asset Turnover0.36
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.43 | ||
| Debt/FCF | 6.88 | ||
| Debt/EBITDA | 2.09 | ||
| Cap/Depr | 59.93% | ||
| Cap/Sales | 7.78% | ||
| Interest Coverage | 7.76 | ||
| Cash Conversion | 58.68% | ||
| Profit Quality | 99.83% | ||
| Current Ratio | 1.91 | ||
| Quick Ratio | 0.99 | ||
| Altman-Z | 2.77 |
F-Score6
WACC8.28%
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)5.82%
EPS 3Y2.77%
EPS 5Y0.33%
EPS Q2Q%5%
EPS Next Y3.61%
EPS Next 2Y5.71%
EPS Next 3Y6.66%
EPS Next 5Y7.76%
Revenue 1Y (TTM)3.84%
Revenue growth 3Y3.99%
Revenue growth 5Y-0.77%
Sales Q2Q%4.28%
Revenue Next Year2.92%
Revenue Next 2Y3.83%
Revenue Next 3Y3.86%
Revenue Next 5Y4.62%
EBIT growth 1Y5.83%
EBIT growth 3Y13.78%
EBIT growth 5Y3.48%
EBIT Next Year33.3%
EBIT Next 3Y13.4%
EBIT Next 5Y9.77%
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%