Zimmer Biomet Lowers EPS Guidance but Raises Revenue Outlook

Zimmer Biomet's recent earnings report reveals a cut in adjusted EPS expectations for 2025, now projected between $7.90 and $8.10. However, the company increases its revenue growth outlook, signaling confidence amidst currency and acquisition challenges.

Date: 05-05-2025

AI Rating: 5

EPS Guidance Change
Zimmer Biomet trimmed its adjusted earnings per share (EPS) guidance for full-year 2025 to a range of $7.90 to $8.10, down from a previous expectation of $8.15 to $8.35. This reduction indicates acknowledgment of challenges that may affect profitability, specifically due to the acquisition of Paragon 28 and currency fluctuations.

Revenue Growth Outlook
Conversely, the company raised its annual revenue growth outlook, projecting growth between 5.7% and 8.2% year-over-year. This is a notable increase compared to previous estimates of just 1.0% to 3.5% growth. The incorporation of Paragon 28 and adjustments related to current tariff proposals influenced this revision. Moreover, constant currency revenue growth is estimated at 5.7% to 7.7%. The shift in growth outlook may appeal to investors focused on revenue expansion, despite the reduced EPS guidance.

Market Implications
The adjustment in EPS could reflect uncertainties that investors generally dislike, leading to cautious sentiment in the near term. However, the revised revenue guidance offers a silver lining, indicating that the company expects to fuel growth despite short-term adjustments. It's also important to note that analysts' expectations indicate a consensus EPS of $8.21 and a revenue outlook of approximately $7.91 billion, suggesting that the market was forecasting a moderate performance alongside the company's projections.

In summary, while the reduced EPS projections may raise concerns among investors, the accompanying revenue growth outlook is more optimistic, providing a compelling narrative for potential future investment.

Stocks: ZBH