Should You Add Zimmer Biomet Stock to Your Portfolio Now?

Zimmer Biomet ZBH is advancing the expansion of its ROSA Robotic Platform alongside its Persona OsseoTi and Oxford Partial Cementless Knee and Cementless Knee implants, which are set to drive growth and expand penetration in the coming years. With a disciplined, four-pillar expansion strategy, the company aims to deliver a 5% weighted average market growth (WAMG) rate by 2027. A gradually recovering musculoskeletal market also shows promise for its businesses. Meanwhile, a debt-laden balance sheet and macroeconomic challenges raise concerns for Zimmer Biomet.

In the past year, this Zacks Rank #2 (Buy) stock has dropped 6.8% against the 3.5% rise of the industry and the 16.6% growth of the S&P 500 composite.

The leading musculoskeletal healthcare company has a market capitalization of $21.30 billion. The company has an earnings yield of 7.5% against the industry’s -0.3%. Zimmer Biomet surpassed estimates in three of the trailing four quarters and missed on one occasion, delivering an average earnings surprise of 1.81%.

Let’s delve deeper.

Tailwinds for ZBH Stock

Strong Prospects in Knee Business: Zimmer Biomet is focusing on the expansion of its ROSA Robotic Platform alongside its Persona OsseoTi Cementless Knee and Oxford Partial Cementless Knee. According to the company, this portfolio combination is expected to accelerate growth, and strengthen robotics and cementless penetration over the coming years.
In 2025, the U.S. knee business is showing momentum, with sequential growth of 150 basis points and year-over-year growth of 1.7%.

Adoption trends are encouraging — nearly 50% of surgeons trained on the Oxford Partial Cementless Knee through the second quarter of 2025 have adopted it in practice, with about 10% converting from competitors. Meanwhile, Persona OsseoTi Cementless Knee penetration continues to move in the right direction. In Europe, the Persona Revision Knee launch is gaining traction with more than 100 accounts implanting the system across Western Europe, with acceleration expected through the rest of 2025 as training expands.

Innovation and Diversification: Zimmer Biomet is pursuing a disciplined, four-pillar expansion strategy to achieve a 5% WAMG rate by 2027. First, the company is boosting patient awareness, like its “This, You Can Do” direct-to-patient campaign, designed to increase awareness of its knee solutions and encourage patients to seek treatment options earlier. Second, Zimmer Biomet is tackling safety and precision. The company’s robotic and navigation platforms, including ROSA and the AI-powered Orthogrid guidance system, are aimed at improving efficiency, accuracy and reproducibility in orthopedic surgery.

Third, Zimmer Biomet is improving efficiency through a combination of smart implants, ASC-focused execution and a growing pipeline of differentiated solutions. Finally, the company is elevating outcomes, with the new Oxford Partial Cementless Knee already showing strong early adoption, nearly 50% of surgeons trained in 2025 incorporating it into their practice and 10% of them converting from competitors. Selective acquisitions remain central to the strategy, backed by disciplined execution and financial strength.

Gradually Stabilizing Market: Despite challenging market conditions in the form of pricing pressure, the last few quarters witnessed gradual stability in the global musculoskeletal market with better-than-expected sales growth in certain geographies, banking on improved procedural volume. The focused execution of the company's global sales teams in a stable global musculoskeletal market also helped accelerate global sales for Persona, the personalized knee system.

In the second quarter of 2025, the company witnessed solid growth driven by continued procedure growth, strong execution and solid momentum with the new innovation cycle. The company saw another positive quarter of year-over-year momentum in large joints, with the overall global Knees, Hips and S.E.T. business growing 1.8%, 4% and 4.9%, respectively, at the constant exchange rate.

What Ails ZBH?

Leveraged Capital Structure: Zimmer Biomet exited the second quarter of 2025 with cash and cash equivalents of $557 million. Meanwhile, total debt came up to $7.57 billion compared to $7.18 billion at the end of the first quarter. The reported quarter's total debt was much higher than the corresponding cash and cash equivalent level, indicating a tough solvency position. This is a matter of concern for the investors.

Macroeconomic Concerns: The ongoing industry-wide trend of staffing shortages and supply chain-related hazards continues to pose risks for ZBH. Deteriorating international trade and geopolitical complications create pressure on raw material and labor costs as well as freight charges. Added to this, high policy rates to fight inflation, along with the gradual withdrawal of fiscal policies amid high debt, continue to dent economic growth, impacting the overall market situation for Zimmer Biomet. Concerning the ongoing tariff issue, Zimmer Biomet now expects about a $40 million impact on 2025 operating profit, principally in the second half, down from the earlier $60-$80 million estimate provided during the first quarter.

ZBH Stock Estimate Trend

The Zacks Consensus Estimate for Zimmer Biomet’s 2025 earnings per share (EPS) has moved up 2% to $8.11 in the past 30 days.

The Zacks Consensus Estimate for the company’s 2025 revenues is pegged at $8.21 billion. This suggests a 7% rise from the year-ago reported number.

Other Key Picks

Some other top-ranked stocks in the broader medical space are Envista NVST, Cardinal Health CAH and Boston Scientific BSX.

Envista has an estimated earnings growth rate of 15.2% for fiscal 2026 compared with the S&P 500 composite’s 11.7% growth. Shares of the company have rallied 15.4% compared with the industry’s 3.4% growth. NVST’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 16.50%.

NVST sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cardinal Health, carrying a Zacks Rank #2, has an estimated long-term earnings growth rate of 12.5% compared with the industry’s 9.9%. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 9.17%. CAH shares have surged 33.1% against the industry’s 4.8% fall in the past year.

Boston Scientific, carrying a Zacks Rank #2, has an earnings yield of 2.8% compared to the industry’s -0.8%. Shares of the company have rallied 31.3% compared with the industry’s 3.5% growth. BSX’s earnings outpaced estimates in each of the trailing four quarters, with the average surprise being 8.11%.

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This article originally published on Zacks Investment Research (zacks.com).

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