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Warsaw, Indiana-based Zimmer Biomet Holdings, Inc. (ZBH) designs, manufactures and markets effective and innovative solutions that support orthopedic surgeons and clinicians in restoring mobility, alleviating pain and improving the quality of life for patients around the world. With a market cap of $21.3 billion, Zimmer Biomet operates in over 25 countries and sells products in over 100 countries worldwide.
Companies worth $10 billion or more are generally described as "large-cap stocks," Zimmer Biomet fits right into that category, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the medical devices industry.
Zimmer Biomet has slipped 19.3% from its 52-week high of $133.90 achieved on Mar. 28. Nevertheless, the stock has gained a modest 1.7% over the past three months, outpacing iShares U.S. Medical Devices ETF’s (IHI) marginal gains during the same time frame.
However, Zimmer’s performance has remained grim over the longer term. ZBH has declined 11.2% on a YTD basis and nearly 9% over the past 52 weeks, significantly lagging behind IHI’s 10.1% gains in 2024 and 12.5% returns over the past year.
To confirm the bearish trend, ZBH has traded consistently below its 200-day moving average since late May and below its 50-day moving average since mid-April with some fluctuations.
Zimmer Biomet’s stock prices soared over 5.7% after the release of its Q3 earnings on Oct. 30. The company showcased impressive resilience and reported growth in revenues across geographies and its various product categories which boosted investor confidence. Zimmer’s net sales surged more than 4% year-over-year to approximately $1.8 billion, which surpassed Wall Street’s expectations by a notable 1.1%.
However, due to a 5.2% increase in selling, general, and admin expenses, its operating profits grew by a modest 4.8% to $279.5 million and its adjusted EPS of $1.74 missed analysts’ estimates, despite the company lowering its investment in research and development. Furthermore, the company reduced its full-year revenue and earnings guidance, following the initial surge ZBH stock declined 2.6% in the next trading session.
Zimmer Biomet has underperformed its peer Medtronic plc’s (MDT) 1.2% decline on a YTD basis and 1.5% dip over the past year.
However, analysts remain optimistic about the stock’s prospects. ZBH has a consensus “Moderate Buy” rating among the 28 analysts covering it. The mean price target of $123.88 represents a 14.6% premium to current price levels.
