ZBH: Share Momentum Will Return As Next-Gen Orthopedics Gain Wider Adoption

Zimmer Biomet Holdings' analyst price target has been reduced from approximately $111 to $105 per share. Analysts cite slower-than-expected revenue growth, continued profit margin pressure, and more cautious future business outlooks following disappointing quarterly results.

Analyst Commentary

Following Zimmer Biomet Holdings' recent earnings report, analysts have offered a range of perspectives on the company's outlook. The general sentiment reflects a mix of optimism around certain initiatives and ongoing caution regarding sales momentum and profit trends.

Bullish Takeaways

Bullish analysts remain positive on Zimmer Biomet's commercial and innovation progress, citing advancements in its product pipeline and portfolio diversification.
Recent launches, such as Oxford Cementless and Osseofit, have received encouraging feedback from orthopedic surgeons and are expected to support broader adoption and growth.
Despite challenging results, some analysts believe attractive valuations and opportunities within the wider medical devices sector could benefit the company's shares over time.
Areas of relative strength continue to be highlighted, with Knee growth outpacing certain peers even as other segments showed softness.

Bearish Takeaways

Bearish analysts have lowered their growth expectations for Zimmer Biomet, warning that 2025 may mark the fourth consecutive year of decelerating top-line growth.
Concerns remain about the mismatch between management guidance and underlying business trends. This has prompted price target reductions from several major institutions, including JPMorgan and Goldman Sachs.
The latest earnings report was viewed as a "step backwards," leading to neutral ratings and decreased price targets. This reflects doubts around near-term execution and profitability.
International and noncore business headwinds were cited as contributors to underperformance in the quarter, and disappointing quarterly results have tempered previous investor enthusiasm about new product launches.

What's in the News

Zimmer Biomet maintained its 2025 earnings guidance and is projecting reported revenue growth between 6.7% and 7.7% (Key Developments).
The company's iodine-treated total hip replacement system received FDA Breakthrough Device Designation, marking the first such recognition in Zimmer Biomet's history and addressing infection risks in joint replacement (Key Developments).
Zimmer Biomet highlighted major robotic technology and digital care solutions at the 2025 annual American Association of Hip and Knee Surgeons meeting. This included new systems for knee and hip reconstruction as well as artificial intelligence-assisted technologies (Key Developments).
The company announced the full commercial launch of innovative foot and ankle trauma solutions, expanding its U.S. product portfolio with the Gorilla Pilon Fusion Plating System and the Phantom TTC Trauma Nail (Key Developments).
Japanese regulators approved Zimmer Biomet's iTaperloc Complete and iG7 Hip Systems, which are the world's first orthopedic implants leveraging Iodine Technology to inhibit bacterial adhesion (Key Developments).

Valuation Changes

Fair Value Estimate has decreased from $110.92 to $104.84, reflecting a modest decline in perceived intrinsic value.
Discount Rate has increased slightly from 8.22% to 8.77%, indicating a higher risk premium applied to future cash flows.
Revenue Growth Projections have fallen from 5.53% to 4.79%, indicating expectations of slower growth in coming years.
Net Profit Margin has edged down from 14.62% to 14.11%, suggesting slightly reduced profitability expectations.
Future P/E Ratio has dipped marginally from 20.37x to 20.23x, which points to lower valuation multiples on anticipated earnings.

Expanding into high-growth segments and leveraging digital health and robotics is boosting recurring revenue, premium product adoption, and margin expansion.
Operational efficiencies, divestitures, and strong US execution are driving improved cash flow and above-market share gains in core orthopedic categories.
Rising pricing pressures, regulatory uncertainties, and execution risks from acquisitions and innovation may hinder Zimmer Biomet's market position, margin stability, and overall growth potential.

Catalysts

About Zimmer Biomet Holdings

Operates as a medical technology company worldwide.What are the underlying business or industry changes driving this perspective?

The growing global elderly population and the rise in chronic lifestyle diseases are expected to accelerate procedure volumes for orthopedic implants and joint replacements, positioning Zimmer Biomet for long-term sustained revenue growth as demand structurally expands.
Strategic acquisitions-such as Monogram Technologies and Paragon 28-are diversifying Zimmer Biomet into higher-growth market segments and introducing innovative, AI-driven robotics, which is projected to enhance future top-line growth and support higher returns on invested capital from 2027 onwards.
The company's focused investment in digital health, robotics, and data-driven surgical solutions (including the ROSA and upcoming Monogram platforms) is increasing adoption of premium offerings, enabling margin expansion due to product mix and driving recurring revenues through connected care ecosystems, supporting higher net margins and earnings predictability.
Operational improvements, supply chain efficiencies, and ongoing portfolio optimization-including divestiture of non-core businesses and disciplined cost management-are resulting in better-than-expected free cash flow generation and improving adjusted net margins even amidst integration expenses from recent M&A.
Zimmer Biomet's strengthened US commercial execution, focus on ambulatory surgery center (ASC) growth, strong pipeline of new product launches, and successful integration of acquired commercial channels are expected to sustain above-market share gains in hips, knees, and extremities, driving organic revenue growth and improved earnings quality over the next several years.

Zimmer Biomet Holdings Earnings and Revenue Growth

Zimmer Biomet Holdings Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Zimmer Biomet Holdings's revenue will grow by 5.5% annually over the next 3 years.
Analysts assume that profit margins will increase from 10.5% today to 14.6% in 3 years time.
Analysts expect earnings to reach $1.3 billion (and earnings per share of $6.55) by about September 2028, up from $823.5 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $1.8 billion in earnings, and the most bearish expecting $924.9 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 20.4x on those 2028 earnings, down from 25.0x today. This future PE is lower than the current PE for the US Medical Equipment industry at 29.7x.
Analysts expect the number of shares outstanding to decline by 0.49% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.22%, as per the Simply Wall St company report.

Zimmer Biomet Holdings Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Ongoing industry-wide pricing pressures and potential reimbursement challenges, as evidenced by the company's expectation for selling prices to be roughly flat for the full year, could limit future revenue growth and compress net margins over time.
Increasing competitive intensity, particularly from established players like Stryker (who claim to already possess fully autonomous robotic capabilities), may erode Zimmer Biomet's market share in robotics and core orthopedics, threatening long-term revenue growth and profit sustainability.
Heavy reliance on successful integration and commercialization of recent acquisitions (e.g., Paragon 28 and Monogram Technologies), with admissions that acquisitions have led to a decline in year-over-year operating margins and increased leverage, may introduce risks of execution failures or delayed synergies, negatively impacting both earnings and free cash flow.
Uncertainty around regulatory timelines for disruptive technologies, highlighted by management's cautious language about clinical trials and FDA pathways for fully autonomous robotics, could delay new product launches and slow revenue contributions from these platforms well into the latter half of the decade.
Global tariff exposure and macroeconomic risks, while mitigated for the current year, are described as "fluid" and could worsen unexpectedly in the future (especially with changing global trade dynamics), raising costs and threatening both operating profit and future earnings stability.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $110.917 for Zimmer Biomet Holdings based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $138.0, and the most bearish reporting a price target of just $96.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $9.2 billion, earnings will come to $1.3 billion, and it would be trading on a PE ratio of 20.4x, assuming you use a discount rate of 8.2%.
Given the current share price of $103.85, the analyst price target of $110.92 is 6.4% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Aging Population And Robotics Will Elevate Orthopedic Care