ZBH
Zimmer Biomet Holdings, Inc.
$95.75
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 8.8% above fair value
You pay
$95.75
Bear
$70.38
Fair
$87.97
Bull
$105.57
Bear
$70.38
-26.5%
$5.62 × 12x P/E
Fair
$87.97
-8.1%
$5.62 × 15x P/E
Bull
$105.57
+10.3%
$5.62 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
17.0x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $96.57 from 42 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $87.97 per share.
Warnings
The company's reported profits differ from official accounting profits by 58%. Check what costs are being left out of the adjusted number.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples