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Warsaw, Indiana-based Zimmer Biomet Holdings, Inc. (ZBH) designs, manufactures, and markets effective, innovative solutions that support orthopedic surgeons and clinicians in restoring mobility, alleviating pain, and improving the quality of life for patients worldwide. With a market cap of $21.6 billion, it operates in more than 25 countries across the globe and sells products in more than 100 countries. It is expected to release its Q3 earnings before the market opens on Wednesday, Oct. 30.
Ahead of the event, analysts expect Zimmer to report a profit of $1.75 per share, up 6.1% from $1.65 per share reported in the year-ago quarter. The company has surpassed Wall Street’s adjusted EPS projections in each of the past four quarters. Its adjusted EPS for the last reported quarter grew 10.4% year-over-year to $2.01, exceeding the consensus estimates by 1.5%.
For fiscal 2024, analysts expect Zimmer to report an adjusted EPS of $7.97, up 5.6% from $7.55 in fiscal 2023. In fiscal 2025, its adjusted EPS is expected to grow 7.8% year-over-year to $8.59.
ZBH stock has declined 13.8% on a YTD basis, significantly underperforming the S&P 500 Index’s ($SPX) 22.5% gains and the Health Care Select Sector SPDR Fund’s (XLV) 11.7% returns during the same time frame.
Despite reporting better-than-expected earnings and revenues, shares of Zimmer Biomet plunged 3.4% after the release of its Q2 earnings on Aug. 7 as the company lowered its full-year revenue growth forecast, citing the expected impact of foreign currency exchange. However, the company reported a solid 3.9% year-over-year growth in net sales, reaching $1.9 billion, exceeding Wall Street’s expectations. It also showcased efficient cost management skills which led to a 1.3% net margin expansion to 12.5% compared to the year-ago quarter, this translated into a staggering 15.8% growth in net earnings to shareholders, totaling $242.8 million.
The consensus opinion on ZBH stock is moderately bullish, with an overall “Moderate Buy” rating. Out of the 28 analysts covering the stock, seven recommend “Strong Buy,” two advise “Moderate Buy,” 17 suggest “Hold,” and two advocate a “Strong Sell” rating. The mean price target of $123.80 represents a potential upside of nearly 18% from current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
