Is Zimmer Biomet Holdings, Inc. (ZBH) overvalued or undervalued?
Updated Nov 10, 2026 · hand-researched model · educational, not advice
At a recent price of $108.33, Zimmer Biomet Holdings, Inc. (ZBH) sits inside a range too wide to call either way: our valuation lenses put the business somewhere between $70.87 and $205.26 per share. They disagree too widely for us to state a single fair value. We publish the range rather than a midpoint because a number that precise would claim more than the methods can support. This is an educational model, not a price target or a recommendation.
The valuation discounts Zimmer Biomet Holdings, Inc.'s projected free cash flows at a weighted-average cost of capital (WACC) of 8.2%, with a long-run terminal growth rate of 2.5%. About 78% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, ZBH's modeled DCF value ranges from about $39.49 to $150.68 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what Zimmer Biomet Holdings, Inc. would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of ZBH's intrinsic value. Figures update as new filings and prices come in.
The assumptions behind ZBH's DCF
| Input | Value | Source |
|---|---|---|
| Base-year revenue | $8,231,500,000 | Zimmer Biomet Q4 2025 earnings release, 8-K Ex-99.1 (accession 0001193125-26-043620, filed 2026-02-10); FY2025 10-K (accession 0001193125-26-059853, filed 2026-02-20): FY2025 net sales $8,231.5M, +7.2% reported, +6.4% constant currency, +3.9% organic constant currency. PARAGON 28 IS ALREADY IN THIS BASE for ~8.3 months: the foot-and-ankle company was bought on 2025-04-21 for $1,241.5M cash plus a CVR (fair value $35M, up to ~$90M) and contributed ~2.5 points of FY2025 growth. Monogram (orthopedic robotics, closed 2025-10-07, $175.9M plus CVRs of up to ~$570M) has no meaningful revenue yet. CROSS-CHECK H1 2026: net sales $4,263.7M, +7.0% reported, +5.7% constant currency, +3.4% organic (Paragon 28 added 2.3 points until its 21 April anniversary); Q2 alone $2,177.0M, +4.8% reported, +4.0% organic. TTM through 2026-06-30 = $8,231.5M - $3,986.4M + $4,263.7M = $8,508.8M. By product, H1 2026: knees $1,657.5M (+0.9% cc — the weak spot), hips $1,086.8M (+4.2% cc), S.E.T. incl. Paragon 28 $1,148.2M (+2.6% organic), technology & data $371.2M (+16.8% cc). |
| Base EBIT margin | 13.3% | Zimmer Biomet Q4 2025 earnings release, 8-K Ex-99.1 (accession 0001193125-26-043620) — statement of earnings and operating-profit reconciliation: GAAP OPERATING PROFIT, not the company's 'adjusted operating profit'. FY2025 operating profit $1,098.1M / $8,231.5M = 13.34%. It INCLUDES, and this model keeps as real costs: $665.9M (8.1 pts) of acquired-intangible amortization, $181.2M restructuring, $76.9M acquisition/integration, $17.0M EU MDR, $6.0M litigation, $11.3M other, and $206.3M (2.5 pts) of inventory and manufacturing charges. Management's adjusted operating margin for the same year was 27.5% ($2,262.7M) — the 14-point gap is exactly those items. The base is UNUSUALLY LOW: $172.2M of the inventory charge landed in Q4 2025 (excess and obsolete stock on product lines being discontinued by 2032, Paragon 28 inventory step-up, and accelerated costs of a plant shutdown); without it the margin would be 15.85%. FY2024 GAAP was 16.7%, FY2023 17.3%. CROSS-CHECK H1 2026: operating profit $699.2M / $4,263.7M = 16.40% (adjusted 26.5%, amortization 7.6 pts, other charges 2.5 pts). The base margin is not used to project; it only sets the 'peak' for the site's cyclical test, and Year 1 (16.3%) is the higher of the two. |
| Forecast revenue growth | 4% → 4% → 4% → 4% → 4% | Assumption — TickerWorth's 5-year explicit forecast |
| Risk-free rate | 5.2% | US 10Y Treasury constant maturity (FRED DGS10): 5.24% on 2026-10-01, the latest published observation; program-wide input shared by every researched model in this run. |
| Beta | 0.85 | Assumption — normalized estimate (published Yahoo/yfinance 5Y-monthly beta 0.485): NORMALIZED UP from the published 0.485 — CONSERVATIVE (raises WACC, lowers value). A 0.485 beta says the shares barely move with the market; that is an artefact of five years in which Zimmer Biomet de-rated on its own story (per the FY2025 10-K performance graph, $100 invested at end-2020 was worth $62.65 at end-2025 with dividends, against $196.16 for the S&P 500 and $126.87 for the S&P 500 Health Care Equipment index), not evidence that a levered (~30% debt) implant maker carries half the market's risk. 0.85 matches the SOLV and GEHC models in this tracker and sits in the ~0.8-1.0 range typical of large medtech. At the published 0.485 the value would be about $103 — above today's price; at 1.0 about $61.5. Today's price implies about 0.59 (a WACC of ~7.3%). |
| Terminal growth | 2.5% | Assumption — house default: House default 2.5% (roughly long-run nominal GDP), kept for comparability with SOLV and GEHC. Joint-replacement volumes are driven by ageing populations and obesity, which supports this; pricing in orthopedics has been flat-to-down for a decade, which caps it. Must stay below WACC (8.22%). At 2.0% the value falls ~$7; at 3.0% it rises ~$9. |
| Diluted shares | 193M | Zimmer Biomet Q2 2026 10-Q (accession 0001193125-26-335044, filed 2026-08-05): Q2 2026 weighted-average diluted shares 192.8M (H1 194.3M; FY2025 198.7M). CONSERVATIVE: the weighted average lags the buyback — Zimmer Biomet repurchased $500.8M of stock in H1 2026 (5.6M shares) and 190,737,689 shares were outstanding on 2026-07-30. Management guides ~193M diluted for FY2026 and raised its 2026 buyback to up to $1B, so another ~$500M (~5.5M shares) is expected in H2 — funded partly with debt, which this June 30 net debt does not yet show. On 191.4M (outstanding plus ~0.6M of dilutive awards) the value would be ~$0.5 higher. |
| Market price | $108.33 | Delayed quote · as of 2026-11-10 05:40 UTC |
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