Zimmer Biomet (NYSE:ZBH) Issues Earnings Results

Key Points

• Zimmer Biomet beat quarterly expectations: Adjusted EPS was $2.07 versus the $2.01 consensus, while revenue reached $2.18 billion, up 4.8% year over year and above estimates.
• Full-year 2026 guidance was raised: The company now expects adjusted EPS of $8.47–$8.59 and organic revenue growth of 2.25%–3.25%, supported by strength in hips, technology and other higher-growth businesses.
• Profitability remains a key focus: Adjusted operating margin fell 210 basis points to 25.7% as Zimmer Biomet continues investing in its sales-force transformation, although operating cash flow rose 18% and free cash flow increased 24%.

Zimmer Biomet (NYSE:ZBH - Get Free Report) announced its quarterly earnings data on Wednesday. The medical equipment provider reported $2.07 EPS for the quarter, beating analysts' consensus estimates of $2.01 by $0.06, FiscalAI reports. The company had revenue of $2.18 billion during the quarter, compared to the consensus estimate of $2.13 billion. Zimmer Biomet had a net margin of 9.05% and a return on equity of 13.24%. The company's quarterly revenue was up 4.8% on a year-over-year basis. During the same quarter last year, the firm posted $2.07 EPS. Zimmer Biomet updated its FY 2026 guidance to 8.470-8.590 EPS.

Here are the key takeaways from Zimmer Biomet's conference call:

• Positive Sentiment: Zimmer Biomet reported Q2 net sales of $2.177 billion, up 4.0% organically at constant currency, exceeding expectations; U.S. organic growth was 4.6%, led by hips, technology, and higher-growth S.E.T. businesses.
• Positive Sentiment: The company raised its 2026 organic revenue growth outlook to 2.25%-3.25% from 1%-3% and adjusted EPS guidance to $8.47-$8.59; reported sales growth guidance increased to 3.9%-4.9%.
• Positive Sentiment: New products and technology are gaining traction, including the Z1 hip stem, HAMMR, OrthoGrid, iodine-coated hips in Japan, and ROSA Shoulder; technology sales grew 21.5% overall and more than 50% in the U.S.
• Neutral Sentiment: The U.S. sales-force transformation is progressing ahead of expectations, but Zimmer Biomet plans to continue investing in specialized commercial capabilities through 2027, putting pressure on margins; Q2 adjusted operating margin declined 210 basis points to 25.7%.
• Positive Sentiment: Operating cash flow rose 18% to $448 million and free cash flow increased 24% to $308 million; the company plans to repurchase up to $1 billion of shares in 2026, including $500 million already repurchased in the first half.

Zimmer Biomet Stock Performance

ZBH stock traded up $2.40 during trading hours on Wednesday, hitting $98.21. 2,758,828 shares of the stock were exchanged, compared to its average volume of 2,315,474. Zimmer Biomet has a 12 month low of $79.12 and a 12 month high of $108.29. The company has a current ratio of 1.73, a quick ratio of 0.95 and a debt-to-equity ratio of 0.50. The firm has a market capitalization of $19.00 billion, a P/E ratio of 25.49, a P/E/G ratio of 2.86 and a beta of 0.45. The company has a 50-day simple moving average of $89.30 and a two-hundred day simple moving average of $89.95.

Zimmer Biomet Announces Dividend

The company also recently disclosed a quarterly dividend, which was paid on Friday, July 31st. Shareholders of record on Thursday, June 25th were given a dividend of $0.24 per share. The ex-dividend date was Thursday, June 25th. This represents a $0.96 annualized dividend and a yield of 1.0%. Zimmer Biomet's dividend payout ratio (DPR) is presently 24.94%.

Wall Street Analyst Weigh In

ZBH has been the subject of a number of research analyst reports. Leerink Partners assumed coverage on Zimmer Biomet in a report on Monday, April 13th. They set a "hold" rating and a $101.00 price target for the company. Zacks Research downgraded Zimmer Biomet from a "hold" rating to a "strong sell" rating in a research note on Monday, July 27th. Robert W. Baird set a $92.00 target price on Zimmer Biomet in a report on Wednesday, April 29th. Wells Fargo & Company dropped their price target on Zimmer Biomet from $98.00 to $90.00 and set an "equal weight" rating on the stock in a research note on Wednesday, April 29th. Finally, Wall Street Zen raised shares of Zimmer Biomet from a "hold" rating to a "buy" rating in a research report on Saturday, July 25th. One analyst has rated the stock with a Strong Buy rating, eight have given a Buy rating, twelve have assigned a Hold rating and four have assigned a Sell rating to the company. According to data from MarketBeat.com, Zimmer Biomet currently has a consensus rating of "Hold" and an average target price of $102.00.

Zimmer Biomet News Roundup

Here are the key news stories impacting Zimmer Biomet this week:

• Positive Sentiment: Q2 results exceeded expectations. Zimmer Biomet reported $2.177 billion in second-quarter sales, up 4.8% year over year and above the $2.13 billion analyst estimate. Adjusted diluted EPS was $2.07, beating consensus of $2.01. Zimmer Biomet Q2 Earnings and Revenues Beat Estimates
• Positive Sentiment: Full-year guidance was raised. The company now expects 2026 adjusted EPS of $8.47 to $8.59, broadly in line with the $8.48 consensus, and revenue of approximately $8.6 billion, above the roughly $8.5 billion analyst estimate. Zimmer Biomet raises guidance on Q2 beats
• Positive Sentiment: Underlying growth remained healthy. Second-quarter sales increased 4.0% on an organic constant-currency basis, while reported diluted EPS rose 33.8% to $1.03, supporting the market’s favorable initial reaction. Zimmer Biomet Announces Second Quarter 2026 Financial Results
• Neutral Sentiment: Adjusted profitability was mixed. Adjusted EPS of $2.07 was unchanged from the prior-year period despite revenue growth, indicating that operating-cost or margin pressures offset some of the sales improvement. Analysts and investors will likely focus on the company’s margin trajectory and execution against the upgraded outlook.

Insider Activity at Zimmer Biomet

In related news, insider Sang Yi sold 5,000 shares of the company's stock in a transaction dated Friday, May 29th. The shares were sold at an average price of $82.64, for a total value of $413,200.00. Following the transaction, the insider directly owned 27,251 shares in the company, valued at approximately $2,252,022.64. This represents a 15.50% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. Company insiders own 1.28% of the company's stock.

Institutional Inflows and Outflows

Hedge funds have recently made changes to their positions in the business. Invesco Ltd. grew its position in Zimmer Biomet by 10.6% during the fourth quarter. Invesco Ltd. now owns 3,361,075 shares of the medical equipment provider's stock worth $302,228,000 after buying an additional 322,689 shares in the last quarter. Corient Private Wealth LLC raised its holdings in Zimmer Biomet by 38.4% in the 4th quarter. Corient Private Wealth LLC now owns 58,288 shares of the medical equipment provider's stock valued at $5,241,000 after acquiring an additional 16,162 shares in the last quarter. State of Tennessee Department of Treasury lifted its position in shares of Zimmer Biomet by 58.6% during the 4th quarter. State of Tennessee Department of Treasury now owns 102,244 shares of the medical equipment provider's stock valued at $8,902,000 after acquiring an additional 37,767 shares during the period. Mackenzie Financial Corp grew its holdings in shares of Zimmer Biomet by 12.0% during the 4th quarter. Mackenzie Financial Corp now owns 98,981 shares of the medical equipment provider's stock worth $8,969,000 after purchasing an additional 10,600 shares in the last quarter. Finally, NewEdge Advisors LLC increased its position in shares of Zimmer Biomet by 7.3% in the fourth quarter. NewEdge Advisors LLC now owns 2,982 shares of the medical equipment provider's stock worth $268,000 after purchasing an additional 203 shares during the period. 88.89% of the stock is owned by institutional investors.

Zimmer Biomet Company Profile

Zimmer Biomet NYSE: ZBH is a global medical device company focused on musculoskeletal healthcare. Headquartered in Warsaw, Indiana, the company designs, manufactures and markets a broad portfolio of products used to treat joint disorders, bone disorders and related conditions. Its customer base includes orthopaedic and dental surgeons, hospitals, ambulatory surgery centers and other healthcare providers that rely on implants, instruments and related services for reconstructive and restorative procedures.

The company's product offerings span joint replacement systems for hips, knees and shoulders; trauma and extremities implants; spine and thoracic solutions; dental and craniomaxillofacial implants and prosthetics; and sports medicine devices.

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