Zimmer Biomet (ZBH)
Healthcare · NYSE · US
Fundamentals
Valuation and ratings
Zimmer Biomet trades at $93.75, which is 59% below the $148.61 our discounted cash flow model puts on the business. On that measure alone it screens as undervalued, though a DCF is an argument rather than a measurement, and the market is frequently right about why something is cheap.
Our moat model scores it 59 out of 100, which is a moat, but not a deep one. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 23.7 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Zimmer Biomet
Zimmer Biomet Holdings, Inc., together with its subsidiaries, operates as a medical technology company worldwide. The company designs, manufactures, and markets orthopedic reconstructive products, such as knee and hip products; S.E.T. products, including sports medicine, biologics, foot and ankle, upper extremities, and trauma and CMFT products; sports medicine products for the repair of soft tissue injuries, used in the knee and shoulder; and craniomaxillofacial and thoracic products comprising face and skull reconstruction products, as well as products that fixate and stabilize the bones of the chest to facilitate healing or reconstruction after open-heart surgery, trauma, or for deformities of the chest. It offers technology and data, bone cement, and surgical products; and a suite of integrated digital and robotic technologies that leverage data, data analytics and artificial intelligence. The company's products and solutions are used to treat patients suffering from disorders of, or injuries to, bones, joints, or supporting soft tissues. It serves orthopedic surgeons, neurosurgeons, hospitals, healthcare institutions, stocking distributors, healthcare dealers, and other specialists, as well as agents, healthcare purchasing organizations, or buying groups. It also offers ROSA Robot, which utilizes robotic technologies to assist a surgeon with implant positioning in total knee arthroplasty or partial knee arthroplasty; and the ZBEdge Platform connects robotic and digital technologies together to collect data before, during and after surgery, that can deliver insights to surgeons to assist in making informed decisions on patient care. The company was formerly known as Zimmer Holdings, Inc. and changed its name to Zimmer Biomet Holdings, Inc. in June 2015. Zimmer Biomet Holdings, Inc. was founded in 1927 and is headquartered in Warsaw, Indiana.
ZBH passes 3 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Smart money ownership
5 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- Bill Nygren, HARRIS ASSOCIATES L P$2.34B · 1.6% of book
- Dodge & Cox, DODGE & COX$2.13B · 1.2% of book
- Ken Griffin, CITADEL ADVISORS LLC$124.66M · 0.0% of book
- Arrowstreet Capital, ARROWSTREET CAPITAL, LIMITED PARTNERSHIP$99.84M · 0.1% of book
- Harry Burn, SOUND SHORE MANAGEMENT INC /CT/$95.14M · 3.2% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is Zimmer Biomet (ZBH) undervalued?
Against our discounted cash flow estimate of $148.61, ZBH at $93.75 is 59% below fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own ZBH?
5 of the institutions we track reported a position in ZBH in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is ZBH's P/E ratio?
ZBH trades at 23.7 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
The full research page for ZBH, with financial statements, ownership detail, peer comparison and alerts, is free inside the app.
Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.