Zimmer Biomet (ZBH): Reassessing Valuation After Mixed Q3 Results and Growing Investor Concerns
Zimmer Biomet Holdings (ZBH) just delivered mixed Q3 results, with organic sales rising but overall revenue missing expectations, and that gap has clearly weighed on the stock compared with both the Health Care sector and key peers.
See our latest analysis for Zimmer Biomet Holdings.
That underperformance has been building for a while, with the latest earnings miss reinforcing a weaker trend, as the share price sits at $92.27 and the 1 year total shareholder return is down 12.88 percent.
If this kind of volatility has you reconsidering your options, it might be a good time to explore other healthcare stocks that are showing stronger momentum and different risk profiles.
With the stock trading below both analyst targets and some intrinsic value estimates despite solid double digit earnings growth, the key question now is whether Zimmer Biomet is genuinely undervalued or if the market is already discounting stronger growth ahead.
Most Popular Narrative Narrative: 10.3% Undervalued
Zimmer Biomet Holdings latest close at $92.27 sits below the most widely followed fair value estimate of about $102.92, setting up a valuation story driven by execution and growth quality rather than hype.
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.
Want to know why a mid single digit growth outlook still supports a richer future earnings multiple than today, even after margin pressures and mixed recent execution? The narrative focuses on growing profitability, an expanding premium product mix, and a lower discount rate to argue that today’s price leaves room for upside. Curious which specific earnings and margin paths would need to occur for that gap to close? Dive into the full narrative to see the exact roadmap behind this valuation view.
Result: Fair Value of $102.92 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, near term execution missteps and intensifying competition in robotics and core orthopedics could quickly challenge the assumptions behind that undervalued thesis.
Find out about the key risks to this Zimmer Biomet Holdings narrative.
Build Your Own Zimmer Biomet Holdings Narrative
If you see things differently or want to dig into the numbers yourself, you can quickly build a custom view in just a few minutes: Do it your way.
A great starting point for your Zimmer Biomet Holdings research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
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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.
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