Results: Zimmer Biomet Holdings, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

It's been a good week for Zimmer Biomet Holdings, Inc. (NYSE:ZBH) shareholders, because the company has just released its latest third-quarter results, and the shares gained 4.8% to US$107. It looks like a credible result overall - although revenues of US$1.8b were what the analysts expected, Zimmer Biomet Holdings surprised by delivering a (statutory) profit of US$1.23 per share, an impressive 22% above what was forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Zimmer Biomet Holdings

Taking into account the latest results, the consensus forecast from Zimmer Biomet Holdings' 28 analysts is for revenues of US$8.02b in 2025. This reflects a credible 5.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 4.5% to US$5.69. In the lead-up to this report, the analysts had been modelling revenues of US$8.04b and earnings per share (EPS) of US$5.72 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of US$125, suggesting that the company has met expectations in its recent result. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Zimmer Biomet Holdings at US$150 per share, while the most bearish prices it at US$107. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. For example, we noticed that Zimmer Biomet Holdings' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 4.5% growth to the end of 2025 on an annualised basis. That is well above its historical decline of 0.1% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 8.3% annually for the foreseeable future. Although Zimmer Biomet Holdings' revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$125, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Zimmer Biomet Holdings. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Zimmer Biomet Holdings analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Zimmer Biomet Holdings has 2 warning signs we think you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.