Value
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 5.5 |
| P/S | 8.9 |
| EV/EBITDA | 5.8 |
| Fwd P/E | 9.2 |
| PEG | 9.4 |
| Analyst target | 4.0 |
- ▸Forward P/E: 10.6x
- ▸PEG: 0.60
- ▸Attractively valued
ZBH · Why this verdict
Why Zimmer Biomet Holdings (ZBH) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictHOLD
Overall score6.0/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Zimmer Biomet has achieved a perfect 4-for-4 earnings beat streak and a maximum Piotroski F-Score of 9/9, yet trades at a death-cross technical setup with almost no gap to its analyst price target, making the risk-reward unattractive at current levels.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Zimmer Biomet has beaten earnings estimates in all 4 of the last 4 quarters, with the most recent beat of 12.2% against the $1.86 estimate — demonstrating consistent operational execution in the orthopedic device market. Earnings | The company beats earnings estimates in at least 3 of the next 4 quarters, maintaining an average positive surprise above 3%. | →Stable |
| CounterFour consecutive beats may set a high bar for future quarters; a single miss could reset sentiment sharply, especially given the already-narrow analyst target gap. | ||
The company scores a perfect 9/9 Piotroski F-Score and converts 137% of net income into free cash flow, indicating that cash generation substantially exceeds accounting profit — a durable sign of financial health. Quality breakdown | Piotroski F-Score remains at 8 or above over the next 12 months, and free cash flow conversion stays above 100% of net income. | →Stable |
| CounterA 137% free-cash-flow conversion rate may reflect timing differences or working capital benefits that normalize over time, and the low return on assets of 2.7% signals limited capital efficiency despite strong cash flows. | ||
With the current price at $88.26 and the analyst target at $88.83, the stock has essentially reached consensus fair value, leaving only 0.6% upside and an unfavorable reward-to-risk ratio of 0.11. Targets | Analyst consensus price target rises above $100, exceeding the current target by more than 12%, providing renewed upside potential. | ↓Deteriorating |
| CounterAt analyst-target parity, the stock offers no margin of safety; any negative development — whether from a supplier disruption or guidance cut — could cause a meaningful decline with limited upside buffer. | ||
The stock is in a confirmed death-cross pattern with the 200-day moving average sloping downward at -2.1% per 30 days and volume distribution indicating institutional selling — even though MACD has recently improved and RSI sits at 64. Momentum breakdown | The 200-day moving average slope returns to flat or positive within 6 months, and price closes above the 200-day moving average for at least 10 consecutive days. | ↓Deteriorating |
| CounterA death cross with confirmed downward MA slope and falling on-balance volume suggests sustained institutional distribution; the improving MACD may be a short-term bounce within a longer decline. | ||
Zimmer Biomet has beaten earnings estimates in all 4 of the last 4 quarters, with the most recent beat of 12.2% against the $1.86 estimate — demonstrating consistent operational execution in the orthopedic device market.
→StableEarnings
- Expectation
- The company beats earnings estimates in at least 3 of the next 4 quarters, maintaining an average positive surprise above 3%.
CounterFour consecutive beats may set a high bar for future quarters; a single miss could reset sentiment sharply, especially given the already-narrow analyst target gap.
The company scores a perfect 9/9 Piotroski F-Score and converts 137% of net income into free cash flow, indicating that cash generation substantially exceeds accounting profit — a durable sign of financial health.
→StableQuality breakdown
- Expectation
- Piotroski F-Score remains at 8 or above over the next 12 months, and free cash flow conversion stays above 100% of net income.
CounterA 137% free-cash-flow conversion rate may reflect timing differences or working capital benefits that normalize over time, and the low return on assets of 2.7% signals limited capital efficiency despite strong cash flows.
With the current price at $88.26 and the analyst target at $88.83, the stock has essentially reached consensus fair value, leaving only 0.6% upside and an unfavorable reward-to-risk ratio of 0.11.
↓DeterioratingTargets
- Expectation
- Analyst consensus price target rises above $100, exceeding the current target by more than 12%, providing renewed upside potential.
CounterAt analyst-target parity, the stock offers no margin of safety; any negative development — whether from a supplier disruption or guidance cut — could cause a meaningful decline with limited upside buffer.
The stock is in a confirmed death-cross pattern with the 200-day moving average sloping downward at -2.1% per 30 days and volume distribution indicating institutional selling — even though MACD has recently improved and RSI sits at 64.
↓DeterioratingMomentum breakdown
- Expectation
- The 200-day moving average slope returns to flat or positive within 6 months, and price closes above the 200-day moving average for at least 10 consecutive days.
CounterA death cross with confirmed downward MA slope and falling on-balance volume suggests sustained institutional distribution; the improving MACD may be a short-term bounce within a longer decline.
Per-dimension breakdown
Quality
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.1 |
| ROA | 2.6 |
| Gross margin | 9.9 |
| Op margin | 7.2 |
| Net margin | 4.7 |
| Current ratio | 6.1 |
| FCF quality | 9.4 |
| Moat | 6.0 |
| Rule of 40 | 3.0 |
| Piotroski F | 10.0 |
- ▸Excellent cash conversion: 133% FCF/NI
- ▸Rule of 40: 17 (fail)
- ▸Strong Piotroski F-Score: 9/9
Growth
6.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.7 |
| EPS growth | 8.8 |
Momentum
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.3 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Overbought (RSI 75)
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.5 |
| Analyst rating | 7.5 |
| Price target | 6.4 |
Insider
6.2/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 6.7 |
| notable moves | 7.0 |
- ▸Negligible insider selling — $824,028 (0.004% of mkt cap)
Peer rank
4.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.6 |
| quality rank | 6.2 |
| growth rank | 2.3 |
Technical
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.2 |
| support resistance | 1.4 |
| 52w position | 8.5 |
Risk (lower is worse)
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.2 |
| days to cover | 7.1 |
| volatility | 6.5 |
| put call | 0.0 |
| implied vol | 5.9 |
| max pain risk | 3.0 |
| beta | 10.0 |
| debt equity | 7.4 |
- ▸Elevated put/call: 2.89
- ▸Above max pain $75
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 4.7 |
| dividend safety | 8.5 |
| news activity | 5.0 |
- ▸Perfect beat streak: 4Q
- ▸Earnings in 6 days
- ▸Dividend aristocrat: 1.0% yield
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLD|L3:NEWS_MOD_NO_UPSIDEPassed (4)
- MOMENTUM:4.9>=4.5
- INSIDER:OK
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-0.1=NEGATIVE
- EARNINGS_PROXIMITY:6d<=7d
Warning (2)
- MOMENTUM:4.9<5.5 (soft — BUY_NOW allowed but watch)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.13
Upside
-1.4%
Downside
10.7%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:4.9>=4.5. Top dim: Value at 7.2; weakest: Technical at 4.0. No conviction either direction.
The strongest dimensions are Value at 7.2, Sentiment at 6.5, and Catalyst at 6.4; the weakest are Technical at 4.0, Peer rank at 4.9, and Momentum at 4.9. The V9 engine flagged 2 failed gates with 2 warnings, producing an asymmetric reward-to-risk of -0.13 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Earnings Beat Streak
Trip ifEPS surprise falls below 0% in at least 2 of the next 4 quarters.
- P2Maximum Piotroski Quality Score
Trip ifFree cash flow conversion drops below 80% of net income for 2 consecutive quarters.
- P3Analyst Target Exhausted
Trip ifAnalyst consensus price target declines below $80, falling more than 10% below the current $88.83.
- P4Death Cross Downtrend
Trip ifPrice drops below $83, declining more than 6% from the current $88.26, while the 200-day MA slope remains below -1% per 30 days.