Is Zimmer Biomet Stock the Right Pick for Your Portfolio Now?

Zimmer Biomet ZBH appears well-positioned for growth in the coming quarters, supported by the continued execution of its market strategies centered on People and Culture, Operational Excellence, and Innovation and Diversification pillars. Growth in the U.S. knee business revenues is backed by the robust adoption of its cementless offerings. A stabilizing global musculoskeletal market is expected to bolster the company’s growth outlook.

In the past year, this Zacks Rank #3 (Hold) stock has dropped 22% compared with the 20.5% fall of the industry and the 18.3% growth of the S&P 500 composite.

The leading musculoskeletal healthcare company has a market capitalization of $17.18 billion. The company’s earnings yield of 9.6% is well ahead of the industry’s 2.6% yield. Zimmer Biomet surpassed estimates in each of the trailing four quarters, delivering an average earnings surprise of 2.53%.

Let’s delve deeper.

Tailwinds for ZBH Stock

Solid Market Expansion Strategies: Zimmer Biomet continues to execute solid market strategies focusing on its three core pillars. Under People and Culture, the company appointed Kevin Thornal as group president, Global Businesses and the Americas, aligning leadership strengthening with its focus on building organizational capabilities to support growth. Under Operational Excellence, Zimmer Biomet generated $1.172 billion of free cash flow in 2025, reflecting improved cash generation and disciplined capital allocation while navigating tariff headwinds and integrating acquisitions.

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Under Innovation and Diversification, Zimmer Biomet completed its acquisition of Monogram Technologies, adding surgeon-guided semi and fully autonomous robotic technologies to its robotics portfolio, which are expected to expand its robotics offerings and begin commercialization with Zimmer Biomet implants in early 2027. The company’s broader new product wave, including upgrades such as ROSA Knee with OptimiZe, continues to contribute to portfolio strength.

Strong Prospects in Knee Business: Zimmer Biomet continues to sharpen its focus on accelerating growth in its Knee portfolio, driven by the expanding adoption of the Persona OsseoTi Cementless Knee, the Oxford Partial Cementless Knee and continued strength in its ROSA Robotic Platform. In the fourth quarter of 2025, the U.S. knee business revenues grew 6% year over year, supported by a robust uptake of cementless offerings.

Persona OsseoTi ended 2025 at approximately 35% penetration of U.S. total knee implants, reflecting continued acceleration from prior levels. The company maintains its long-term objective of driving cementless penetration meaningfully higher, supported by training expansion and competitive conversions. The adoption of the Oxford Partial Cementless Knee continues to outperform expectations, with high post-training adoption rates and solid competitive account wins. Robotics also remains a key growth driver.

Gradually Stabilizing Market: Despite ongoing pricing pressure, Zimmer Biomet reported continued stability in the global musculoskeletal market through 2025, supported by healthy end markets, improved procedure volumes and solid new product momentum. Management highlighted steady demand trends across key regions, though international performance remained somewhat variable quarter to quarter. Focused commercial execution and an accelerating innovation cycle continued to support global sales momentum for Persona and other core franchises. In the fourth quarter of 2025, the company delivered organic constant currency revenue growth of 5.4%, with U.S. growth of 5.7% and international growth of 5%.

What Ails ZBH?

Leveraged Capital Structure: Zimmer Biomet exited the fourth quarter of 2025 with cash and cash equivalents of $591 million and total debt of $7.52 billion. This highly leveraged balance sheet is a matter of concern for investors. At the end of the fourth quarter, the company’s debt-to-capital ratio of 37.2% stands at a moderately high level.

Competitive Landscape: The presence of a large number of players has made the medical device market intensely competitive. The orthopedic industry, in particular, is highly competitive with the presence of players like Stryker, Johnson & Johnson's DePuy, Smith & Nephew and Medtronic. Zimmer Biomet needs to constantly introduce or acquire new products to withstand competitive pressure and maintain its market share.

ZBH Stock Estimate Trend

The Zacks Consensus Estimate for Zimmer Biomet’s 2026 earnings per share (EPS) has remained constant at $8.40 in the past 30 days.

The Zacks Consensus Estimate for the company’s 2026 revenues is pegged at $8.55 billion. This suggests a 3.9% rise from the year-ago reported number.

Key Picks

Some better-ranked stocks in the broader medical space are Globus Medical GMED, Phibro Animal Health PAHC and Intuitive Surgical ISRG.

Globus Medical has an earnings yield of 5.2%, well ahead of the industry’s -1.6% yield. Its earnings surpassed estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 18.8%. The company’s shares have rallied 15.9% against the industry’s 7.5% fall in the past year.

GMED sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Phibro Animal Health, sporting a Zacks Rank #1 at present, has an earnings yield of 6.1% compared with the industry’s 2.6% return. Shares of the company have soared 156.6% against the industry’s 20.5% decline. PAHC’s earnings beat estimates in each of the trailing four quarters, the average surprise being 20.2%.

Intuitive Surgical, carrying a Zacks Rank #2 (Buy), has an earnings yield of 2.1% against the industry’s 0.7% decline. Shares of the company have dropped 6.2% compared with the industry’s 7.4% fall. ISRG’s earnings topped estimates in each of the trailing four quarters, the average surprise being 13.2%.

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Intuitive Surgical, Inc. (ISRG): Free Stock Analysis Report

Globus Medical, Inc. (GMED): Free Stock Analysis Report

Phibro Animal Health Corporation (PAHC): Free Stock Analysis Report

Zimmer Biomet Holdings, Inc. (ZBH): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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