Zimmer Biomet Holdings, Inc. Just Recorded A 14% EPS Beat: Here's What Analysts Are Forecasting Next
Shareholders might have noticed that Zimmer Biomet Holdings, Inc. (NYSE:ZBH) filed its yearly result this time last week. The early response was not positive, with shares down 2.8% to US$123 in the past week. It looks like a credible result overall - although revenues of US$7.4b were in line with what the analysts predicted, Zimmer Biomet Holdings surprised by delivering a statutory profit of US$4.88 per share, a notable 14% above expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Zimmer Biomet Holdings after the latest results.
View our latest analysis for Zimmer Biomet Holdings
Taking into account the latest results, the most recent consensus for Zimmer Biomet Holdings from 26 analysts is for revenues of US$7.74b in 2024. If met, it would imply a satisfactory 4.7% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to rise 7.4% to US$5.26. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$7.70b and earnings per share (EPS) of US$5.32 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$136. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Zimmer Biomet Holdings at US$175 per share, while the most bearish prices it at US$109. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that Zimmer Biomet Holdings is forecast to grow faster in the future than it has in the past, with revenues expected to display 4.7% annualised growth until the end of 2024. If achieved, this would be a much better result than the 2.3% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 7.9% per year. Although Zimmer Biomet Holdings' revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Zimmer Biomet Holdings' revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Zimmer Biomet Holdings analysts - going out to 2026, and you can see them free on our platform here.
Before you take the next step you should know about the 1 warning sign for Zimmer Biomet Holdings that we have uncovered.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
