Zimmer Biomet: Moderate Buy Rating Ahead of Q4 Earnings

Investors eye Zimmer Biomet ahead of their Q4 earnings report. Analysts project an EPS increase, despite challenges like staffing shortages and supply chain issues that have affected stock performance.

Date: 20-01-2025

AI Rating: 6

Earnings Per Share (EPS)
ZBH is expected to report a diluted EPS of $2.30 for its upcoming fourth-quarter earnings, reflecting a 4.6% increase compared to the same quarter last year. For the full year, analysts project an EPS of $7.99, which is 5.8% higher than $7.55 from fiscal 2023, and an anticipated rise to $8.57 in fiscal 2025 shows expected growth.

Revenue Growth
The company's revenue of $1.82 billion in Q3 exceeded Wall Street’s forecast of $1.8 billion, indicating positive revenue dynamics. Despite these gains, ZBH's stock has underperformed relative to the S&P 500 and the Health Care Select Sector SPDR Fund over the past year.

Challenges Affecting Performance
ZBH has faced significant operational hurdles, including staffing shortages and supply chain disruptions, which have negatively impacted their financial performance. High interest rates and geopolitical challenges further complicate the company's market conditions.

The overall outlook for ZBH remains cautiously optimistic, with a moderate buy rating from analysts who believe in the company's potential upside given its current price levels and analyst price target of $123.56, indicating a 12.8% upside potential. However, the challenges cited may lead to cautious investor sentiment leading into the earnings announcement.

Stocks: ZBH SPX XLV