Company Overview - Zimmer Biomet Holdings, Inc. (ZBH) has a market capitalization of $19.6 billion and specializes in musculoskeletal healthcare solutions, including orthopedic reconstructive implants and various medical technologies [1] - The company is classified as a "large-cap" stock, which typically includes companies valued over $10 billion [2] Stock Performance - ZBH shares have decreased by 13.6% from their 52-week high of $114.72, while returning 7.6% over the past three months, in line with the Dow Jones Industrials Average [3] - Year-to-date, ZBH stock has declined by 6.2%, underperforming the Dow Jones Industrials Average, which has increased by 7.6% [4] - Over the past 52 weeks, ZBH shares have dropped 7.7%, compared to a 9.9% rise in the Dow Jones Industrials Average [4] - Despite recent declines, ZBH stock has been trading above its 50-day moving average since early August [5] Recent Financial Results - On August 7, ZBH shares rose nearly 8% following the release of better-than-expected Q2 2025 results, reporting adjusted EPS of $2.07 and revenue of $2.08 billion [6] - The company raised its 2025 adjusted EPS forecast to between $8.10 and $8.30, exceeding analyst expectations, and reduced anticipated tariff headwinds to approximately $40 million [6] Competitive Landscape - ZBH has underperformed compared to its rival, Penumbra, Inc. (PEN), which has seen a YTD increase of 10.7% and a 52-week increase of 40.1% [7] - Analysts maintain a moderately optimistic outlook for ZBH, with a consensus rating of "Moderate Buy" from 27 analysts and a mean price target of $110.96, indicating an 11.9% premium to current levels [7]

Core Viewpoint - Zimmer Biomet (ZBH) is currently viewed as a better value opportunity compared to EssilorLuxottica Unsponsored ADR (ESLOY) based on various financial metrics and rankings [1]. Group 1: Zacks Rank and Earnings Outlook - ZBH has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while ESLOY has a Zacks Rank of 3 (Hold) [3]. - The Zacks Rank emphasizes stocks with positive revisions to earnings estimates, suggesting that ZBH has an improving earnings outlook [3]. Group 2: Valuation Metrics - ZBH has a forward P/E ratio of 12.80, significantly lower than ESLOY's forward P/E of 38.31, indicating that ZBH may be undervalued [5]. - The PEG ratio for ZBH is 2.40, while ESLOY's PEG ratio is 4.98, further suggesting that ZBH offers better value considering expected earnings growth [5]. - ZBH's P/B ratio is 1.65, compared to ESLOY's P/B of 3.22, reinforcing the notion that ZBH is more attractively valued [6]. Group 3: Value Grades - ZBH has earned a Value grade of A, while ESLOY has a Value grade of D, highlighting the relative attractiveness of ZBH as a value investment [6]. - Stronger estimate revision activity and more favorable valuation metrics for ZBH lead to the conclusion that it is the superior option for value investors at this time [7].

Group 1 - The Carillon Scout Mid Cap Fund's second quarter 2025 investor letter indicates that the Russell Midcap Index experienced positive returns despite a sell-off in early April due to tariff announcements [1] - The delay in collecting additional tariffs allowed trading partners more time to negotiate better terms, which may have positively influenced market conditions [1] - Zimmer Biomet Holdings, Inc. (NYSE:ZBH) is highlighted as a key stock, with a one-month return of 1.99% and a 52-week loss of 1.25%, closing at $103.85 per share with a market capitalization of $20.572 billion [2] Group 2 - Zimmer Biomet Holdings, Inc. reported net sales of $2.077 billion in the second quarter, reflecting a 7% increase on a reported basis [4] - The company faced challenges, including lowered guidance due to dilution from a recent acquisition and market share loss in knee replacement products, despite an overall solid earnings report [3] - The lowered guidance is viewed as a one-time reset, with expectations for revenue growth to accelerate due to an upcoming new release cycle and potential positive impacts from tariff news [3]

Group 1 - Zimmer Biomet Holdings, Inc. (NYSE:ZBH) is considered an undervalued stock with a strong market position, as evidenced by Comerica Bank increasing its stake by 36.3% in Q1, now holding 46,206 shares valued at approximately $5,230,000 [1] - The company is focusing on business acceleration initiatives, including the acquisition of Monogram Technologies to enhance its total knee robotics technology, aiming for fully automated total knee surgeries by 2027-28 [2] - Zimmer Biomet completed its acquisition of Paragon 28 for $1.2 billion, positioning itself in the $5 billion foot and ankle orthopedic market [3] Group 2 - Zimmer Biomet, based in Warsaw, Indiana, is a medical technology company founded in 1927, dedicated to improving quality of life through orthopedic reconstructive products and other medical technologies [4]

Core Insights - The company expresses high confidence in achieving a growth rate of approximately 6% in Q3, as previously indicated in their August 7 commentary [1] - The company anticipates that Q4 may experience a softer performance compared to Q3 [1] Group 1 - The company plans for an acceleration in growth as implied in their 2025 guidance [1] - The CEO emphasizes the importance of maintaining public commentary and refraining from speculation beyond the disclosed information [1] - The company will be surprised if the growth rate does not reach at least 6% in Q3, indicating strong expectations for performance [1]

Summary of the Conference Call for Zimmer Biomet Company Overview - **Company**: Zimmer Biomet - **Event**: Mawlitthami Healthcare Conference Key Points Industry Dynamics - The orthopedic market is experiencing a healthy environment with global growth projected at over 4% [4][19] - The U.S. market is seeing significant changes, particularly with the rise of Ambulatory Surgery Centers (ASCs), which have increased from 1-2% of sales to over 20% [18][20] - Demographic trends are favorable, with 10,000 to 12,000 people turning 65 daily in the U.S., driving demand for orthopedic procedures [17] Financial Guidance and Performance - Zimmer Biomet expects to achieve a revenue growth of 3.5% to 4.5% for the year 2025, with Q3 anticipated to reach around 6% growth [3][5] - The company has reduced its tariff estimates from $60 million-$80 million to about $40 million, contributing to increased earnings per share guidance [13][14] - Cash flow generation has exceeded expectations, leading to a lower debt load and improved operating margins [14] Product Innovations - The "Magnificent Seven" new products are driving growth, including the Oxford Partial Cement and Z1 Triple Tapered Stem, which are gaining market share [9][10] - The company is launching new products in 2026, including ROSA D15, which will enhance surgical accuracy and efficiency [12] - The integration of Paragon 28 is progressing well, contributing at least 270 basis points of revenue growth this year [37] Market Segmentation and Strategy - Zimmer Biomet is focusing on specialization within its sales force, particularly in the ASC market, to enhance productivity and efficiency [48][49] - The company is committed to maintaining pricing discipline, with a pricing group reporting directly to the CFO [28][32] - The extremities business is growing faster than traditional hip and knee segments, driven by younger demographics and high reimbursement rates [40] Competitive Landscape - Zimmer Biomet is positioned as a leader in the orthopedic market, with a strong focus on innovation and operational execution [69] - The company is committed to maintaining its leadership in robotic surgery with ongoing investments in the ROSA platform and the upcoming Monogram Technologies for autonomous robotics [64][43] International Markets - The international markets are healthy, with growth in regions like Japan and Australia, although challenges remain in China [53][59] - Pricing dynamics in international markets are improving, contrary to previous expectations [61] Cultural and Operational Changes - The company has undergone significant cultural and operational changes since 2019, with improved engagement scores and a stronger balance sheet [68][69] - Zimmer Biomet is focused on accountability and performance within its sales teams, ensuring that growth is tied to compensation [49] Future Outlook - The company is optimistic about its future, with a strong pipeline of innovations and a commitment to enhancing its market position through strategic investments and partnerships [44][69] Additional Insights - The company is exploring various modalities of navigation and robotics, aiming to offer comprehensive solutions in orthopedic surgery [45][66] - There is a strong emphasis on maintaining quality and innovation as key drivers for market selection by healthcare providers [41] This summary encapsulates the key insights and strategic directions discussed during the conference call, highlighting Zimmer Biomet's focus on innovation, market dynamics, and financial performance.

Core Insights - Zimmer Biomet (ZBH) is focusing on expanding its ROSA Robotic Platform and cementless knee implants to drive growth and market penetration, targeting a 5% weighted average market growth (WAMG) rate by 2027 [1][6] - The company has a market capitalization of $21.30 billion and has shown an earnings yield of 7.5%, outperforming the industry average of -0.3% [2] - Despite a 6.8% decline in stock value over the past year, ZBH has surpassed earnings estimates in three of the last four quarters, with an average earnings surprise of 1.81% [2] Growth Drivers - The knee business is expected to see significant growth, with a sequential increase of 150 basis points and a year-over-year growth of 1.7% projected for 2025 [4] - Adoption rates for the Oxford Partial Cementless Knee are promising, with nearly 50% of trained surgeons incorporating it into practice, and 10% converting from competitors [5] - The Persona OsseoTi Cementless Knee is also gaining traction, particularly in Europe, where over 100 accounts are implanting the system [5] Strategic Initiatives - Zimmer Biomet's four-pillar expansion strategy includes increasing patient awareness, enhancing safety and precision through robotics, improving efficiency with smart implants, and elevating surgical outcomes [6][9] - The company is implementing a direct-to-patient campaign to boost awareness of knee solutions and encourage earlier treatment seeking [6] - The focus on robotics and navigation platforms aims to enhance efficiency and accuracy in orthopedic surgeries [6] Market Conditions - The global musculoskeletal market is gradually stabilizing, with better-than-expected sales growth in certain regions, supported by improved procedural volumes [10] - In Q2 2025, Zimmer Biomet reported year-over-year growth in large joints, with the overall global business for knees, hips, and S.E.T. growing by 1.8%, 4%, and 4.9% respectively [11] Financial Position - As of Q2 2025, Zimmer Biomet had cash and cash equivalents of $557 million against total debt of $7.57 billion, indicating a challenging solvency position [12] - The company anticipates a $40 million impact on 2025 operating profit due to tariffs, a reduction from the earlier estimate of $60-$80 million [13] - The Zacks Consensus Estimate for Zimmer Biomet's 2025 earnings per share has increased by 2% to $8.11, with revenues expected to rise by 7% to $8.21 billion [14]

Group 1 - Zimmer Biomet Holdings, Inc. will present at the Annual Morgan Stanley Healthcare Conference on September 8, 2025, at 8:30 a.m. ET [1] - A live webcast of the presentation will be available on Zimmer Biomet's Investor Relations website and will be archived for replay [1] Group 2 - Zimmer Biomet is a global leader in medical technology, focusing on maximizing mobility and improving health through innovative products and integrated digital and robotic technologies [2] - The company leverages data, data analytics, and artificial intelligence to enhance the patient experience [2] Group 3 - With over 90 years of experience, Zimmer Biomet is committed to delivering high-quality solutions to patients and providers [3] - The company emphasizes a culture of evolution and innovation in its operations [3] Group 4 - Zimmer Biomet operates in over 25 countries and has sales in more than 100 countries [4]

Company Overview - Zimmer Biomet is a leading musculoskeletal healthcare company that designs, manufactures, and markets a wide range of orthopedic reconstructive products, including sports medicine, biologics, extremities and trauma products, spine, bone healing, craniomaxillofacial and thoracic products, dental implants, and related surgical products [11] - The company operates in over 25 countries and markets products in more than 100 countries [11] Investment Analysis - Zimmer Biomet currently holds a 3 (Hold) rating on the Zacks Rank, with a VGM Score of B [12] - The company has a Momentum Style Score of A, with shares increasing by 10.3% over the past four weeks [12] - In the last 60 days, 10 analysts have revised their earnings estimates higher for fiscal 2025, with the Zacks Consensus Estimate increasing by $0.16 to $8.11 per share [12] - Zimmer Biomet has an average earnings surprise of +1.8%, indicating a positive trend in earnings performance [12] - With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, Zimmer Biomet is recommended for investors' consideration [13]

Core Viewpoint - The healthcare sector is currently undervalued, presenting opportunities for investors to acquire quality stocks at discounted prices [1][2]. Group 1: Zoetis - Zoetis operates in the animal health industry, providing a wide range of drugs and healthcare products for companion animals and livestock, with a portfolio of approximately 300 product lines [3][4]. - The animal health market is projected to grow from $48 billion in 2023 to between $75 billion and $85 billion by 2033, with Zoetis historically outpacing industry growth [4]. - Zoetis has a P/E ratio of 25, its lowest ever, and is expected to grow earnings by 9% to 10% annually over the next three to five years, making it an attractive long-term investment [5]. Group 2: Johnson & Johnson - Johnson & Johnson is a major player in pharmaceuticals and medical devices, having spun off its consumer products segment to focus on faster-growing areas [6][7]. - The company has a strong dividend history, having paid and raised its dividend for 63 consecutive years, with a current yield of 3% [7][8]. - The stock trades at a P/E ratio of 18, with expected annualized earnings growth of just over 7% in the coming years [8]. Group 3: Zimmer Biomet - Zimmer Biomet specializes in products for joint replacement, dental implants, and surgical robotics, addressing the needs of an aging population [9][10]. - The company has a low dividend payout ratio, currently at 12% of estimated 2025 earnings, indicating potential for significant dividend growth [11]. - Zimmer Biomet trades at 11 times 2025 earnings estimates, with expected earnings growth of 5% to 6% annually over the next three to five years [12].