ZIMMER BIOMET HOLDINGS INC (ZBH) Stock Fundamental Analysis
NYSE:ZBH - New York Stock Exchange, Inc. - US98956P1021 - Common Stock
Taking everything into account, ZBH scores 6 out of 10 in our fundamental rating. ZBH was compared to 191 industry peers in the Health Care Equipment & Supplies industry. While ZBH belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. ZBH scores decently on growth, while it is valued quite cheap. This could make an interesting 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.
Of the past 5 years ZBH 4 years were profitable.
In the past 5 years ZBH always reported a positive cash flow from operatings.
1.2 Ratios
With an excellent Return On Assets value of 4.99%, ZBH belongs to the best of the industry, outperforming 85.26% of the companies in the same industry.
Looking at the Return On Equity, with a value of 8.76%, ZBH belongs to the top of the industry, outperforming 83.68% of the companies in the same industry.
With an excellent Return On Invested Capital value of 7.19%, ZBH belongs to the best of the industry, outperforming 84.74% of the companies in the same industry.
ZBH had an Average Return On Invested Capital over the past 3 years of 5.54%. This is below the industry average of 8.08%.
The 3 year average ROIC (5.54%) for ZBH is below the current ROIC(7.19%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.99% | ||
| ROE | 8.76% | ||
| ROIC | 7.19% |
ROA(3y)2.52%
ROA(5y)2.32%
ROE(3y)4.43%
ROE(5y)4.26%
ROIC(3y)5.54%
ROIC(5y)4.94%
1.3 Margins
ZBH has a better Profit Margin (14.27%) than 90.53% of its industry peers.
Looking at the Operating Margin, with a value of 20.43%, ZBH belongs to the top of the industry, outperforming 93.16% of the companies in the same industry.
ZBH's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 71.78%, ZBH belongs to the top of the industry, outperforming 82.63% of the companies in the same industry.
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 | 20.43% | ||
| PM (TTM) | 14.27% | ||
| GM | 71.78% |
OM growth 3Y23.17%
OM growth 5Y3.66%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y1%
GM growth 5Y0.04%
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.
The number of shares outstanding for ZBH has been increased compared to 5 years ago.
ZBH has a better debt/assets ratio than last year.
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.
The Altman-Z score of ZBH (2.77) is better than 65.26% of its industry peers.
The Debt to FCF ratio of ZBH is 6.59, which is on the high side as it means it would take ZBH, 6.59 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 6.59, ZBH is in the better half of the industry, outperforming 74.21% of the companies in the same industry.
ZBH has a Debt/Equity ratio of 0.38. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.38, ZBH is in line with its industry, outperforming 44.74% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.38 | ||
| Debt/FCF | 6.59 | ||
| Altman-Z | 2.77 |
ROIC/WACC0.87
WACC8.29%
2.3 Liquidity
ZBH has a Current Ratio of 1.36. This is a normal value and indicates that ZBH is financially healthy and should not expect problems in meeting its short term obligations.
ZBH has a Current ratio of 1.36. This is amonst the worse of the industry: ZBH underperforms 80.53% of its industry peers.
ZBH has a Quick Ratio of 1.36. 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 (0.70) than 90.53% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.36 | ||
| Quick Ratio | 0.7 |
3. Growth
3.1 Past
ZBH shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 8.98%, which is quite good.
The Earnings Per Share has been decreasing by -0.21% on average over the past years.
Looking at the last year, ZBH shows a small growth in Revenue. The Revenue has grown by 4.34% in the last year.
The Revenue has been decreasing by -1.40% on average over the past years.
EPS 1Y (TTM)8.98%
EPS 3Y10.06%
EPS 5Y-0.21%
EPS Q2Q%5.45%
Revenue 1Y (TTM)4.34%
Revenue growth 3Y1.72%
Revenue growth 5Y-1.4%
Sales Q2Q%4.03%
3.2 Future
The Earnings Per Share is expected to grow by 6.63% on average over the next years.
The Revenue is expected to grow by 4.27% on average over the next years.
EPS Next Y6.69%
EPS Next 2Y7.11%
EPS Next 3Y6.89%
EPS Next 5Y6.63%
Revenue Next Year3.89%
Revenue Next 2Y4.16%
Revenue Next 3Y4.29%
Revenue Next 5Y4.27%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 13.91, the valuation of ZBH can be described as correct.
93.16% of the companies in the same industry are more expensive than ZBH, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of ZBH to the average of the S&P500 Index (28.19), we can say ZBH is valued rather cheaply.
The Price/Forward Earnings ratio is 12.65, which indicates a correct valuation of ZBH.
ZBH's Price/Forward Earnings ratio is rather cheap when compared to the industry. ZBH is cheaper than 93.68% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of ZBH to the average of the S&P500 Index (24.37), we can say ZBH is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.91 | ||
| Fwd PE | 12.65 |
4.2 Price Multiples
92.63% 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 90.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.3 | ||
| EV/EBITDA | 11.04 |
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)2.08
PEG (5Y)N/A
EPS Next 2Y7.11%
EPS Next 3Y6.89%
5. Dividend
5.1 Amount
ZBH has a yearly dividend return of 0.88%, which is pretty low.
Compared to an average industry Dividend Yield of 1.64, ZBH pays a better dividend. On top of this ZBH pays more dividend than 93.16% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.28, ZBH's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.88% |
5.2 History
The dividend of ZBH has a limited annual growth rate of 0.21%.
ZBH has been paying a dividend for at least 10 years, so it has a reliable track record.
ZBH has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)0.21%
Div Incr Years0
Div Non Decr Years11
5.3 Sustainability
ZBH pays out 18.29% 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.
DP18.29%
EPS Next 2Y7.11%
EPS Next 3Y6.89%
ZIMMER BIOMET HOLDINGS INC
NYSE:ZBH (1/22/2025, 5:05:00 PM)
After market: 109.72 0 (0%)109.72
-0.8 (-0.72%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Equipment & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners93.36%
Inst Owner Change-0.01%
Ins Owners0.07%
Ins Owner Change1.36%
Market Cap21.84B
Analysts70.29
Price Target126.52 (15.31%)
Short Float %3.69%
Short Ratio4.58
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.88% |
Yearly Dividend0.97
Dividend Growth(5Y)0.21%
DP18.29%
Div Incr Years0
Div Non Decr Years11
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.32%
Min EPS beat(2)-0.7%
Max EPS beat(2)0.07%
EPS beat(4)3
Avg EPS beat(4)0.8%
Min EPS beat(4)-0.7%
Max EPS beat(4)2.75%
EPS beat(8)6
Avg EPS beat(8)2.64%
EPS beat(12)9
Avg EPS beat(12)3.5%
EPS beat(16)13
Avg EPS beat(16)3.56%
Revenue beat(2)1
Avg Revenue beat(2)-0.15%
Min Revenue beat(2)-0.92%
Max Revenue beat(2)0.62%
Revenue beat(4)2
Avg Revenue beat(4)-0.14%
Min Revenue beat(4)-0.92%
Max Revenue beat(4)0.62%
Revenue beat(8)5
Avg Revenue beat(8)1.13%
Revenue beat(12)8
Avg Revenue beat(12)0.14%
Revenue beat(16)9
Avg Revenue beat(16)-1.31%
PT rev (1m)-0.4%
PT rev (3m)-0.61%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.02%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.95%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.21%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.91 | ||
| Fwd PE | 12.65 | ||
| P/S | 2.88 | ||
| P/FCF | 22.3 | ||
| P/OCF | 13.81 | ||
| P/B | 1.77 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.04 |
EPS(TTM)7.89
EY7.19%
EPS(NY)8.67
Fwd EY7.9%
FCF(TTM)4.92
FCFY4.48%
OCF(TTM)7.94
OCFY7.24%
SpS38.15
BVpS62.16
TBVpS-6.04
PEG (NY)2.08
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.99% | ||
| ROE | 8.76% | ||
| ROCE | 8.55% | ||
| ROIC | 7.19% | ||
| ROICexc | 7.42% | ||
| ROICexgc | 32.61% | ||
| OM | 20.43% | ||
| PM (TTM) | 14.27% | ||
| GM | 71.78% | ||
| FCFM | 12.9% |
ROA(3y)2.52%
ROA(5y)2.32%
ROE(3y)4.43%
ROE(5y)4.26%
ROIC(3y)5.54%
ROIC(5y)4.94%
ROICexc(3y)5.66%
ROICexc(5y)5.07%
ROICexgc(3y)23.79%
ROICexgc(5y)22.87%
ROCE(3y)6.58%
ROCE(5y)5.87%
ROICexcg growth 3Y27.04%
ROICexcg growth 5Y-0.97%
ROICexc growth 3Y31.48%
ROICexc growth 5Y5.31%
OM growth 3Y23.17%
OM growth 5Y3.66%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y1%
GM growth 5Y0.04%
F-Score8
Asset Turnover0.35
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.38 | ||
| Debt/FCF | 6.59 | ||
| Debt/EBITDA | 1.88 | ||
| Cap/Depr | 61.81% | ||
| Cap/Sales | 7.93% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 62.62% | ||
| Profit Quality | 90.4% | ||
| Current Ratio | 1.36 | ||
| Quick Ratio | 0.7 | ||
| Altman-Z | 2.77 |
F-Score8
WACC8.29%
ROIC/WACC0.87
Cap/Depr(3y)55.02%
Cap/Depr(5y)55.27%
Cap/Sales(3y)7.29%
Cap/Sales(5y)7.34%
Profit Quality(3y)239.64%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)8.98%
EPS 3Y10.06%
EPS 5Y-0.21%
EPS Q2Q%5.45%
EPS Next Y6.69%
EPS Next 2Y7.11%
EPS Next 3Y6.89%
EPS Next 5Y6.63%
Revenue 1Y (TTM)4.34%
Revenue growth 3Y1.72%
Revenue growth 5Y-1.4%
Sales Q2Q%4.03%
Revenue Next Year3.89%
Revenue Next 2Y4.16%
Revenue Next 3Y4.29%
Revenue Next 5Y4.27%
EBIT growth 1Y13.05%
EBIT growth 3Y25.3%
EBIT growth 5Y2.21%
EBIT Next Year32.21%
EBIT Next 3Y12.67%
EBIT Next 5Y8.95%
FCF growth 1Y1.01%
FCF growth 3Y3.93%
FCF growth 5Y-7.37%
OCF growth 1Y12.47%
OCF growth 3Y9.5%
OCF growth 5Y-1.97%