Zimmer Biomet Holdings, Inc. (ZBH) Stock Analysis — Fair Value, Risk & Moat Rating
NYQ · Healthcare · Medical Devices
Is Zimmer Biomet Holdings, Inc. a safe investment right now?
Trading at $92.69, Zimmer Biomet Holdings, Inc. (ZBH) in the Healthcare sector carries a FairValueLabs fair value estimate of $121.88 — a margin of safety of 23.9%, placing it in the Strong Buy Zone. An Altman Z-Score of 2.40 lands in the gray zone, signaling elevated uncertainty around financial health. Our moat rating stands at 2.6/5 stars (Narrow moat · eroding), suggesting limited pricing power in a competitive landscape. On the income side, ZBH currently pays a dividend with a safety grade of .
Could Zimmer Biomet Holdings, Inc. go bankrupt? Altman Z-Score analysis
Z-Score of 2.4 places the company in the gray zone (1.8-3.0), warranting closer scrutiny.
- Below 1.8 — Distress Zone (high bankruptcy risk)
- 1.8 to 3.0 — Gray Zone (elevated uncertainty)
- Above 3.0 — Safe Zone (financially healthy)
What drives ZBH's Z-Score?
| Component | Formula | Value | Weight | Contribution |
|---|---|---|---|---|
| A · Working Capital / Total Assets | WC / TA | 0.1098 | 1.2 | 0.13 |
| B · Retained Earnings / Total Assets | RE / TA | 0.5028 | 1.4 | 0.7 |
| C · EBIT / Total Assets | EBIT / TA | 0.0487 | 3.3 | 0.16 |
| D · Market Cap / Total Liabilities | MCap / TL | 1.7461 | 0.6 | 1.05 |
| E · Revenue / Total Assets | Rev / TA | 0.3565 | 1.0 | 0.36 |
How has ZBH's financial health changed over time?
| Year | Z-Score | Zone |
|---|---|---|
| 2022 | 2.38 | Gray |
| 2023 | 2.52 | Gray |
| 2024 | 2.63 | Gray |
| 2025 | 2.4 | Gray |
Source: Calculated from ZBH's latest 10-K filing on SEC EDGAR.
What is Zimmer Biomet Holdings, Inc. actually worth?
How we calculated this
| Input | Value | Source |
|---|---|---|
| Predicted EPS (α) | $5.49 | Proprietary blend of reported actuals + analyst consensus, weighted by α |
| Last Year EPS | $3.55 | Annual report (SEC EDGAR) |
| Analyst Consensus EPS (This Year) | $8.40 | 21 analysts consensus |
| Trailing P/E | 26.1x | Current market pricing |
| Fair P/E (β discount) | 22.2x | Trailing PE adjusted by value discount factor β, hard-capped |
| Earnings Trend (γ) | Accelerating | Directional signal: predicted vs trailing EPS |
Wall Street Reference: Analyst consensus target price is $102.95 (21 analysts). This is shown for reference only and is not used in our valuation model.
Source: Earnings data from SEC EDGAR filings. Market data via Yahoo Finance.
Does Zimmer Biomet Holdings, Inc. have a durable competitive advantage?
Moat rating: 2.6/5.
What makes up ZBH's moat score?
ROIC Stability
ROIC variability over the past decade. Score: 2/5.
Gross Margin Trend
Gross margin trajectory over the past decade. Score: 3/5.
Switching Costs
Estimated customer lock-in based on margin level. Score: 3/5.
How stable is ZBH's return on invested capital?
| Year | ROIC | Trend |
|---|---|---|
| 2022 | 3.2% | — |
| 2023 | 7.0% | Rising |
| 2024 | 6.7% | Stable |
| 2025 | 5.6% | Declining |
Source: ROIC calculated from SEC EDGAR filings.
Is Zimmer Biomet Holdings, Inc.'s dividend safe?
Can Zimmer Biomet Holdings, Inc. afford its dividend?
Payout ratio is 27.0%. FCF covers the dividend 5.3x. 15 consecutive years of payments.
Zimmer Biomet Holdings, Inc.'s key financial metrics
| Metric | Latest | 1Y Ago | 3Y Ago | Trend |
|---|---|---|---|---|
| Revenue | $8.2B | $7.7B | $6.9B | Rising |
| Net Income | $0.7B | $0.9B | $0.2B | Rising |
| Free Cash Flow | $1.4B | $1.1B | $1.1B | Rising |
| Gross Margin | 69.7% | 71.5% | 70.9% | Stable |
Common questions about Zimmer Biomet Holdings, Inc.
Is Zimmer Biomet Holdings, Inc. at risk of going bankrupt?
Zimmer Biomet Holdings, Inc.'s Altman Z-Score of 2.4 places it in the gray zone. This metric uses balance sheet ratios to predict bankruptcy probability within 2 years. A score below 1.8 signals distress, while above 3.0 indicates safety.
What is Zimmer Biomet Holdings, Inc.'s estimated fair value?
Our valuation model estimates Zimmer Biomet Holdings, Inc.'s fair value at $121.88 per share. The current margin of safety is 23.9%. This estimate uses a PE-based approach with analyst consensus earnings.
Does Zimmer Biomet Holdings, Inc. have a competitive moat?
Zimmer Biomet Holdings, Inc. receives a moat rating of 2.6 out of 5 stars, based on ROIC stability, gross margin trends, and estimated switching costs. A rating above 3.5 suggests a durable competitive advantage.
Is Zimmer Biomet Holdings, Inc.'s dividend safe?
Our dividend safety analysis examines payout ratio, free cash flow coverage, and the company's streak of consecutive dividend payments to determine whether the current payout is sustainable.
FairValueLabs Disclaimer
All valuations, scores, ratings, and classifications on this page are produced by the FairValueLabs internal valuation system. They do not represent actual market value, guaranteed outcomes, or professional investment advice. These are analytical estimates for educational and research purposes only.
This is not financial advice. All data is sourced from SEC EDGAR public filings. Always consult a qualified financial advisor before making investment decisions.
Last updated: Apr 22, 2026. Data sources: SEC EDGAR (financial statements), Yahoo Finance (market data, analyst consensus). Data may not reflect the most recent quarter.
ZBH analysis methodology: How we calculate fair value, Z-Scores, and moat ratings