Zimmer Biomet’s ZBH strategic priorities, new product launches and focus on international expansion bolster our confidence in this stock. Yet, the difficult macroeconomic situation and FX issues are concerning. The stock carries a Zacks Rank #3 (Hold).
Favorable Factors for ZBH
Despite challenging market conditions in the form of pricing pressure, the last few quarters witnessed gradual stability in the global musculoskeletal market with better-than-expected sales growth in certain geographies, banking on improved procedural volume. This was driven by favorable demographics and growing utilization of musculoskeletal healthcare in emerging markets and under-penetrated developed markets. The focused execution of the company's global sales teams amid a stable global musculoskeletal market also helped accelerate global sales for Persona, the personalized knee system.
In line with this, in the first quarter of 2025, the company witnessed strong growth driven by continued procedure growth, strong execution, and solid momentum with the new innovation. The company saw another positive quarter of year-over-year momentum in large joints, with the overall global Knees, Hips and S.E.T. business growing 1.9%, 2.4% and 4.9%, respectively, at a constant exchange rate.
Zimmer Biomet is pursuing a disciplined, four-pillar expansion strategy to achieve a 5% weighted average market growth rate by 2027. First, the company is boosting patient awareness through its “You’ll Be Back” campaign, fronted by chief movement officer Arnold Schwarzenegger. It partners with global medical societies and ramps up digital outreach to encourage the 95% of osteoarthritis sufferers who never seek care. Second, Zimmer Biomet is tackling safety. New iodine surface-treated hip implants, which have debuted in Japan and are slated for launch in the United States, aim to curb periprosthetic joint infections that can carry a higher mortality risk than certain cancers.
Third, Zimmer Biomet is improving efficiency through smart implants, CT-optional ROSA Robotics, and AI-powered OrthoGrid—streamlining workflows, cutting costs, and boosting surgical capacity. Finally, Zimmer Biomet is elevating outcomes. The newly approved Oxford Partial Cementless Knee shows 93% 10-year survivorship versus 90% for cemented versions in 15,000 UK patients.
Zimmer Biomet Holdings, Inc. Price
Zimmer Biomet Holdings, Inc. Price
Zimmer Biomet Holdings, Inc. price | Zimmer Biomet Holdings, Inc. Quote
Selective acquisitions remain part of the strategy, backed by solid integration capabilities and a strong balance sheet. In this regard, Zimmer Biomet completed its acquisition of Paragon 28 in April, expanding its presence in the foot and ankle market. The deal is expected to add 270 basis points to Zimmer Biomet's sales growth in 2025.
Over the past three months, shares of ZBH have declined 6.3% against the industry’s 1.5% gain. With the company consistently focusing on strategic market expansion and new product launches, we expect the stock to regain momentum in the coming days.
Factors Impacting ZBH Stock’s Growth
The ongoing industry-wide trend of staffing shortages and supply chain-related hazards is denting growth for Zimmer Biomet. Deteriorating international trade and geopolitical complications lead to a tough situation related to raw material and labor costs, as well as freight charges. Added to this, high policy rates to fight inflation, along with the gradual withdrawal of fiscal policies amid high debt, continue to dent economic growth, impacting the overall market situation for Zimmer Biomet. Within the Hip category, headwinds in Russia are disproportionately impacting the outside U.S. business. Further, within the S.E.T. category, Zimmer Biomet is facing challenges in the form of reimbursement headwinds, particularly in the Restorative Therapies business.
Concerning the ongoing tariff issue, Zimmer Biomet expects a $60–$80 million impact on 2025 operating profit, mainly in the second half, factoring in mitigation efforts and anticipated European reciprocal tariffs. Combined with the Paragon 28 acquisition, this is expected to reduce full-year adjusted operating margins by 100–150 basis points versus 2024. Our model projects a 7.7% and 6.6% increase in the company’s cost of product sold and selling, general and administrative expenses for 2025.
A substantial portion of Zimmer Biomet’s foreign revenues is generated in Europe and Japan. In recent times, significant increases in the value of the U.S. dollar relative to the euro, the Japanese yen, the Swiss Franc, or other currencies have accordingly had an adverse effect on the company’s results of operations. In the first quarter of 2025, Zimmer Biomet’s net sales were affected by 1.2% from changes in foreign exchange rates.
Key Picks
Some better-ranked stocks in the broader medical space include Hims & Hers Health HIMS, Boston Scientific BSX and Cardinal Health CAH. Each of these carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Estimates for Hims & Hers Health’s 2025 earnings per share have jumped 21.2% to 63 cents in the past 30 days. Shares of the company have surged 247.6% in the past year compared with the industry’s 19.9% growth. Its earnings yield of 1.1% compares comfortably with the industry’s -9.7% yield. HIMS’ earnings surpassed estimates in two of the trailing four quarters, matched in one and missed on another occasion, the average surprise being 19.6%.
Boston Scientific shares have rallied 40.7% in the past year. Estimates for the company’s 2025 earnings per share have jumped 2.1% to $2.91 in the past 30 days. BSX’s earnings beat estimates in each of the trailing four quarters, the average surprise being 8.8%. In the last reported quarter, it posted an earnings surprise of 11.9%.
Estimates for Cardinal Health’s fiscal 2025 earnings per share have increased 2% to $8.09 in the past 30 days. Shares of the company have jumped 56.4% in the past year against the industry’s 0.8% fall. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 910.3%. In the last reported quarter, it delivered an earnings surprise of 9.3%.
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