ZIMMER BIOMET HOLDINGS INC (ZBH) Stock Fundamental Analysis
USA - NYSE:ZBH - US98956P1021 - Common Stock
99.12 USD
-1.84 (-1.82%)
103.05 USD
+3.93 (+3.96%)
We assign a fundamental rating of 5 out of 10 to ZBH. ZBH was compared to 191 industry peers in the Health Care Equipment & Supplies industry. ZBH scores excellent on profitability, but there are concerns on its financial health. ZBH is valued quite cheap, while showing a decent growth score. This is a good combination! Finally ZBH also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
ZBH had positive earnings in the past year.
In the past year ZBH had a positive cash flow from operations.
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
ZBH has a better Return On Assets (3.60%) than 78.53% of its industry peers.
Looking at the Return On Equity, with a value of 6.57%, ZBH belongs to the top of the industry, outperforming 80.10% of the companies in the same industry.
The Return On Invested Capital of ZBH (5.91%) is better than 80.10% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ZBH is below the industry average of 8.46%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.6% | ||
| ROE | 6.57% | ||
| ROIC | 5.91% |
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
Looking at the Profit Margin, with a value of 10.51%, ZBH belongs to the top of the industry, outperforming 83.25% of the companies in the same industry.
In the last couple of years the Profit Margin of ZBH has declined.
ZBH has a better Operating Margin (19.26%) than 91.10% of its industry peers.
In the last couple of years the Operating Margin of ZBH has grown nicely.
ZBH's Gross Margin of 71.06% is amongst the best of the industry. ZBH outperforms 81.68% of its industry peers.
In the last couple of years the Gross Margin of ZBH has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.26% | ||
| PM (TTM) | 10.51% | ||
| GM | 71.06% |
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
ZBH has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, ZBH has less shares outstanding
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 2.52. 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 2.52. This is in the better half of the industry: ZBH outperforms 66.49% of its industry peers.
The Debt to FCF ratio of ZBH is 6.36, which is on the high side as it means it would take ZBH, 6.36 years of fcf income to pay off all of its debts.
ZBH's Debt to FCF ratio of 6.36 is fine compared to the rest of the industry. ZBH outperforms 78.01% of its industry peers.
A Debt/Equity ratio of 0.54 indicates that ZBH is somewhat dependend on debt financing.
ZBH's Debt to Equity ratio of 0.54 is on the low side compared to the rest of the industry. ZBH is outperformed by 64.40% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.54 | ||
| Debt/FCF | 6.36 | ||
| Altman-Z | 2.52 |
ROIC/WACC0.81
WACC7.28%
2.3 Liquidity
A Current Ratio of 1.87 indicates that ZBH should not have too much problems paying its short term obligations.
ZBH's Current ratio of 1.87 is on the low side compared to the rest of the industry. ZBH is outperformed by 65.97% of its industry peers.
A Quick Ratio of 0.96 indicates that ZBH may have some problems paying its short term obligations.
ZBH's Quick ratio of 0.96 is on the low side compared to the rest of the industry. ZBH is outperformed by 77.49% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.87 | ||
| Quick Ratio | 0.96 |
3. Growth
3.1 Past
ZBH shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 1.67%.
The Earnings Per Share has been growing slightly by 0.33% on average over the past years.
ZBH shows a small growth in Revenue. In the last year, the Revenue has grown by 4.11%.
ZBH shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -0.77% yearly.
EPS 1Y (TTM)1.67%
EPS 3Y2.77%
EPS 5Y0.33%
EPS Q2Q%2.99%
Revenue 1Y (TTM)4.11%
Revenue growth 3Y3.99%
Revenue growth 5Y-0.77%
Sales Q2Q%6.97%
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 6.10% on average per year.
The Revenue is expected to grow by 4.71% on average over the next years.
EPS Next Y2.91%
EPS Next 2Y3.84%
EPS Next 3Y5.23%
EPS Next 5Y6.1%
Revenue Next Year7.26%
Revenue Next 2Y6.59%
Revenue Next 3Y5.97%
Revenue Next 5Y4.71%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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 12.50, which indicates a correct valuation of ZBH.
Compared to the rest of the industry, the Price/Earnings ratio of ZBH indicates a rather cheap valuation: ZBH is cheaper than 90.05% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.20, ZBH is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 11.49, the valuation of ZBH can be described as reasonable.
ZBH's Price/Forward Earnings ratio is rather cheap when compared to the industry. ZBH is cheaper than 92.15% of the companies in the same industry.
ZBH is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.71, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.5 | ||
| Fwd PE | 11.49 |
4.2 Price Multiples
89.53% of the companies in the same industry are more expensive than ZBH, based on the Enterprise Value to EBITDA ratio.
ZBH's Price/Free Cash Flow ratio is rather cheap when compared to the industry. ZBH is cheaper than 90.05% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.49 | ||
| EV/EBITDA | 10.46 |
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.
ZBH has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)4.29
PEG (5Y)38.08
EPS Next 2Y3.84%
EPS Next 3Y5.23%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.00%, ZBH has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 1.69, ZBH pays a better dividend. On top of this ZBH pays more dividend than 94.24% 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 2.38.
| 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 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 Years12
5.3 Sustainability
ZBH pays out 23.38% 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.
DP23.38%
EPS Next 2Y3.84%
EPS Next 3Y5.23%
99.12
-1.84 (-1.82%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Equipment & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners98.01%
Inst Owner Change3.09%
Ins Owners0.13%
Ins Owner Change-0.21%
Market Cap19.64B
Analysts70.59
Price Target114.12 (15.13%)
Short Float %2.94%
Short Ratio3.62
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1% |
Yearly Dividend0.97
Dividend Growth(5Y)0.19%
DP23.38%
Div Incr Years0
Div Non Decr Years12
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.28%
Min EPS beat(2)1.25%
Max EPS beat(2)3.32%
EPS beat(4)2
Avg EPS beat(4)0.88%
Min EPS beat(4)-0.7%
Max EPS beat(4)3.32%
EPS beat(8)6
Avg EPS beat(8)1.21%
EPS beat(12)9
Avg EPS beat(12)2.16%
EPS beat(16)12
Avg EPS beat(16)3.02%
Revenue beat(2)1
Avg Revenue beat(2)-0.02%
Min Revenue beat(2)-0.26%
Max Revenue beat(2)0.21%
Revenue beat(4)2
Avg Revenue beat(4)0.01%
Min Revenue beat(4)-0.53%
Max Revenue beat(4)0.62%
Revenue beat(8)3
Avg Revenue beat(8)-0.24%
Revenue beat(12)7
Avg Revenue beat(12)0.8%
Revenue beat(16)9
Avg Revenue beat(16)-0.81%
PT rev (1m)3.23%
PT rev (3m)3.05%
EPS NQ rev (1m)0.54%
EPS NQ rev (3m)3.46%
EPS NY rev (1m)2.29%
EPS NY rev (3m)2.1%
Revenue NQ rev (1m)0.05%
Revenue NQ rev (3m)0.75%
Revenue NY rev (1m)0.52%
Revenue NY rev (3m)0.51%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.5 | ||
| Fwd PE | 11.49 | ||
| P/S | 2.51 | ||
| P/FCF | 16.49 | ||
| P/OCF | 11.81 | ||
| P/B | 1.57 | ||
| P/tB | N/A | ||
| EV/EBITDA | 10.46 |
EPS(TTM)7.93
EY8%
EPS(NY)8.63
Fwd EY8.7%
FCF(TTM)6.01
FCFY6.06%
OCF(TTM)8.39
OCFY8.47%
SpS39.54
BVpS63.23
TBVpS-10.48
PEG (NY)4.29
PEG (5Y)38.08
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.6% | ||
| ROE | 6.57% | ||
| ROCE | 7.48% | ||
| ROIC | 5.91% | ||
| ROICexc | 6.08% | ||
| ROICexgc | 23.79% | ||
| OM | 19.26% | ||
| PM (TTM) | 10.51% | ||
| GM | 71.06% | ||
| FCFM | 15.2% |
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 Turnover0.34
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.54 | ||
| Debt/FCF | 6.36 | ||
| Debt/EBITDA | 2.65 | ||
| Cap/Depr | 45.39% | ||
| Cap/Sales | 6.03% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 65.24% | ||
| Profit Quality | 144.6% | ||
| Current Ratio | 1.87 | ||
| Quick Ratio | 0.96 | ||
| Altman-Z | 2.52 |
F-Score5
WACC7.28%
ROIC/WACC0.81
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)1.67%
EPS 3Y2.77%
EPS 5Y0.33%
EPS Q2Q%2.99%
EPS Next Y2.91%
EPS Next 2Y3.84%
EPS Next 3Y5.23%
EPS Next 5Y6.1%
Revenue 1Y (TTM)4.11%
Revenue growth 3Y3.99%
Revenue growth 5Y-0.77%
Sales Q2Q%6.97%
Revenue Next Year7.26%
Revenue Next 2Y6.59%
Revenue Next 3Y5.97%
Revenue Next 5Y4.71%
EBIT growth 1Y-1.58%
EBIT growth 3Y13.78%
EBIT growth 5Y3.48%
EBIT Next Year33.53%
EBIT Next 3Y12.92%
EBIT Next 5Y9.77%
FCF growth 1Y66.12%
FCF growth 3Y-5.87%
FCF growth 5Y0.84%
OCF growth 1Y23.13%
OCF growth 3Y0%
OCF growth 5Y-1.11%