Zimmer Biomet Holdings, Inc.

ZBH

HealthcareMedical - DevicesNYSE

$83.37

Market Cap: $16.14B

Zimmer Biomet Holdings, Inc. (ZBH) Valuation Summary

Updated May 11, 2026 02:04

Model	Range	Fair Value	Upside
▸ Discounted Cash Flow
Growth Exit 5Y	$77.12 – $354.89	$134.77	+61.7%
Growth Exit 10Y	$87.69 – $370.06	$147.01	+76.3%
EBITDA Exit 5Y	$101.37 – $210.42	$151.44	+81.6%
EBITDA Exit 10Y	$105.50 – $231.27	$159.44	+91.2%
▸ Trading Multiples
P/E	$74.06 – $115.61	$136.36	+63.6%
EV/EBITDA	$103.70 – $193.97	$124.44	+49.3%
EV/Revenue	$69.70 – $266.70	$146.84	+76.1%
▸ PEG
PEG Fair Value	$211.94 – $211.94	$211.94	+154.2%
▸ Earnings Power Value
Earnings Power Value	$58.80 – $104.75	$77.25	-7.3%
▸ Dividend Discount
Dividend Discount	$10.34 – $21.90	$14.41	-82.7%

Valuation History

DCF Analysis

Fair Value

$134.77

Market Price

$83.37

Upside / Downside

+61.7%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Zimmer Biomet Holdings, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 3.9% to 3.8% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 71, DPO 56, DIO 368). At a 7.6% WACC with mid-year discounting, the terminal value (78% of enterprise value) is derived from the Gordon Growth Model on Year 6 FCFF at a 2.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $134.77 per share, suggesting ZBH is undervalued by 61.7% at the current price of $83.37.

FCFF Present Value Calculation

WACC

7.61%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	1,802	1,868	1,941	2,038	2,116	2,169
(−) Net Interest	249	258	268	281	292	299
(+) D&A	269	301	321	309	307	315
EBITDA	2,320	2,427	2,530	2,629	2,716	2,784

(−) Tax	253	263	273	287	298	305
(−) CapEx	309	321	333	350	363	372
(−) ΔWC	-90	143	157	210	169	173
Free Cash Flow (FCFF)	1,848	1,701	1,767	1,782	1,887	1,934

Terminal Value						37,808
WACC / Discount Rate	7.6%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	1,781	1,523	1,471	1,378	1,356	26,196

Enterprise Value	33,706
Projection Period	7,510	22.3%
Terminal Value	26,196	77.7%

(−) Current Net Debt	6,927

Equity Value	26,778
(/) Outstanding Shares	199

Fair Price	$134.77

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
5.6%	$185	$210	$242	$288	$355
6.6%	$142	$157	$175	$199	$231
7.6%	$113	$123	$135	$149	$167
8.6%	$93	$99	$107	$117	$128
9.6%	$77	$82	$88	$94	$102

Current price: $83.37. Green = undervalued, Red = overvalued.

Fair Value

$147.01

Market Price

$83.37

Upside / Downside

+76.3%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Zimmer Biomet Holdings, Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 3.9% to 3.3% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 71, DPO 56, DIO 368). At a 7.6% WACC with mid-year discounting, the terminal value (62% of enterprise value) is derived from the Gordon Growth Model on Year 11 FCFF at a 2.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $147.01 per share, suggesting ZBH is undervalued by 76.3% at the current price of $83.37.

FCFF Present Value Calculation

WACC

7.61%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	1,802	1,868	1,941	2,038	2,116	2,211	2,304	2,394	2,480	2,561	2,625
(−) Net Interest	249	258	268	281	292	305	318	330	342	354	362
(+) D&A	269	301	321	309	307	335	349	364	380	395	405
EBITDA	2,320	2,427	2,530	2,629	2,716	2,852	2,971	3,088	3,202	3,310	3,393

(−) Tax	253	263	273	287	298	311	324	337	349	360	369
(−) CapEx	309	321	333	350	363	379	395	411	425	439	450
(−) ΔWC	-90	143	157	210	169	206	201	194	186	177	181
Free Cash Flow (FCFF)	1,848	1,701	1,767	1,782	1,887	1,956	2,051	2,147	2,241	2,333	2,392

Terminal Value											46,759
WACC / Discount Rate	7.6%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	1,781	1,523	1,471	1,378	1,356	1,306	1,273	1,238	1,201	1,162	22,447

Enterprise Value	36,138
Projection Period	13,691	37.9%
Terminal Value	22,447	62.1%

(−) Current Net Debt	6,927

Equity Value	29,210
(/) Outstanding Shares	199

Fair Price	$147.01

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
5.6%	$210	$233	$264	$307	$370
6.6%	$161	$175	$191	$213	$241
7.6%	$129	$137	$147	$159	$174
8.6%	$105	$111	$117	$125	$134
9.6%	$88	$92	$96	$101	$107

Current price: $83.37. Green = undervalued, Red = overvalued.

Fair Value

$151.44

Market Price

$83.37

Upside / Downside

+81.7%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Zimmer Biomet Holdings, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 3.9% to 3.8% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 71, DPO 56, DIO 368). At a 7.6% WACC with mid-year discounting, the terminal value (80% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 15.3x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $151.44 per share, suggesting ZBH is undervalued by 81.6% at the current price of $83.37.

FCFF Present Value Calculation

WACC

7.61%

3% – 20%

EV/EBITDA Exit Multiple

15.30x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	1,802	1,868	1,941	2,038	2,116	2,169
(−) Net Interest	249	258	268	281	292	299
(+) D&A	269	301	321	309	307	315
EBITDA	2,320	2,427	2,530	2,629	2,716	2,784

(−) Tax	253	263	273	287	298	—
(−) CapEx	309	321	333	350	363	—
(−) ΔWC	-90	143	157	210	169	—
Free Cash Flow (FCF)	1,848	1,701	1,767	1,782	1,887	—

Peers' EBITDA Multiple						15.3x
Terminal Value						42,590
WACC / Discount Rate	7.61%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	1,781	1,523	1,471	1,378	1,356	29,509

Enterprise Value	37,019
Projection Period	7,510	20.3%
Terminal Value	29,509	79.7%

(−) Current Net Debt	6,927
Equity Value	30,092
(÷) Outstanding Shares	199M
Fair Price	$151	+81.7%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	11.3x	13.3x	15.3x	17.3x	19.3x
5.6%	$125	$146	$168	$189	$210
6.6%	$119	$139	$159	$180	$200
7.6%	$113	$132	$151	$171	$190
8.6%	$107	$125	$144	$162	$181
9.6%	$101	$119	$137	$154	$172

Current price: $83.37. Green = undervalued, Red = overvalued.

Based on default parameters

Fair Value

$159.44

Market Price

$83.37

Upside / Downside

+91.2%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Zimmer Biomet Holdings, Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 3.9% to 3.3% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 71, DPO 56, DIO 368). At a 7.6% WACC with mid-year discounting, the terminal value (65% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 15.3x to Year 11 EBITDA. After subtracting net debt, the equity value implies a fair price of $159.44 per share, suggesting ZBH is undervalued by 91.2% at the current price of $83.37.

FCFF Present Value Calculation

WACC

7.61%

3% – 20%

EV/EBITDA Exit Multiple

15.30x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	1,802	1,868	1,941	2,038	2,116	2,211	2,304	2,394	2,480	2,561	2,625
(−) Net Interest	249	258	268	281	292	305	318	330	342	354	362
(+) D&A	269	301	321	309	307	335	349	364	380	395	405
EBITDA	2,320	2,427	2,530	2,629	2,716	2,852	2,971	3,088	3,202	3,310	3,393

(−) Tax	253	263	273	287	298	311	324	337	349	360	—
(−) CapEx	309	321	333	350	363	379	395	411	425	439	—
(−) ΔWC	-90	143	157	210	169	206	201	194	186	177	—
Free Cash Flow (FCF)	1,848	1,701	1,767	1,782	1,887	1,956	2,051	2,147	2,241	2,333	—

Peers' EBITDA Multiple											15.3x
Terminal Value											51,906
WACC / Discount Rate	7.61%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	1,781	1,523	1,471	1,378	1,356	1,306	1,273	1,238	1,201	1,162	24,917

Enterprise Value	38,608
Projection Period	13,691	35.5%
Terminal Value	24,917	64.5%

(−) Current Net Debt	6,927
Equity Value	31,681
(÷) Outstanding Shares	199M
Fair Price	$159	+91.2%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	11.3x	13.3x	15.3x	17.3x	19.3x
5.6%	$152	$172	$192	$211	$231
6.6%	$139	$157	$175	$193	$211
7.6%	$127	$143	$159	$176	$192
8.6%	$116	$131	$145	$160	$175
9.6%	$106	$119	$133	$146	$160

Current price: $83.37. Green = undervalued, Red = overvalued.

Based on default parameters

Trading Multiples

Fair Value

$136.36

Market Price

$83.37

Upside / Downside

+63.6%

Verdict

Undervalued

Using the industry peer median P/E Multiples multiple (trailing + forward), Zimmer Biomet Holdings, Inc. (ZBH) has a fair value of $136.36 based on 10 comparable companies in the Medical - Devices industry.

P/E Valuation — Medical - Devices

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing P/E	Forward P/E
Zimmer Biomet Holdings, Inc.ZBH	16,566	23.5x	9.8x
United Therapeutics CorporationUTHR	24,946	20.4x	19.8x
DexCom, Inc.DXCM	23,388	29.0x	23.5x
Waters CorporationWAT	22,846	32.6x	24.2x
West Pharmaceutical Services, Inc.WST	22,749	47.4x	37.6x
Illumina, Inc.ILMN	21,466	26.0x	27.2x
STERIS plcSTE	20,974	34.5x	24.8x
Labcorp Holdings Inc.LH	20,838	24.3x	14.1x
Quest Diagnostics IncorporatedDGX	20,743	21.4x	19.1x
Incyte CorporationINCY	19,691	15.4x	13.1x
Smith & Nephew plcSNN	12,825	20.9x	13.4x
Industry Median		25.2x	21.6x
(*) Profit after tax		705	1,685
Equity Value		17,745	36,443
(/) Outstanding shares		199	199
Fair Price		$89	$183

Selected Fair Value (avg of trailing + forward)

$136.36

+63.6%

Fair Value

$124.44

Market Price

$83.37

Upside / Downside

+49.3%

Verdict

Undervalued

Using the industry peer median EV/EBITDA multiple (trailing + forward), Zimmer Biomet Holdings, Inc. (ZBH) has a fair value of $124.44 based on 10 comparable companies in the Medical - Devices industry.

EV/EBITDA Valuation — Medical - Devices

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/EBITDA	Forward EV/EBITDA
Zimmer Biomet Holdings, Inc.ZBH	16,566	10.6x	10.2x
United Therapeutics CorporationUTHR	24,946	12.9x	12.5x
DexCom, Inc.DXCM	23,388	20.5x	18.3x
Waters CorporationWAT	22,846	23.4x	11.5x
West Pharmaceutical Services, Inc.WST	22,749	30.9x	28.6x
Illumina, Inc.ILMN	21,466	19.9x	18.9x
STERIS plcSTE	20,974	16.9x	17.0x
Labcorp Holdings Inc.LH	20,838	13.7x	13.0x
Quest Diagnostics IncorporatedDGX	20,743	12.4x	12.5x
Incyte CorporationINCY	19,691	9.5x	8.7x
Smith & Nephew plcSNN	12,825	9.9x	9.3x
Industry Median		15.3x	12.8x
(*) EBITDA		2,217	2,304
= Enterprise Value		33,926	29,382
(-) Net Debt		6,927	6,927
Equity Value		26,999	22,455
(/) Outstanding shares		199	199
Fair Price		$136	$113

Selected Fair Value (avg of trailing + forward)

$124.44

+49.3%

Fair Value

$146.84

Market Price

$83.37

Upside / Downside

+76.1%

Verdict

Undervalued

Using the industry peer median EV/Revenue multiple (trailing + forward), Zimmer Biomet Holdings, Inc. (ZBH) has a fair value of $146.84 based on 10 comparable companies in the Medical - Devices industry.

EV/Revenue Valuation — Medical - Devices

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
Zimmer Biomet Holdings, Inc.ZBH	16,566	2.9x	2.7x
United Therapeutics CorporationUTHR	24,946	7.3x	7.2x
DexCom, Inc.DXCM	23,388	5.1x	4.6x
Waters CorporationWAT	22,846	7.5x	3.7x
West Pharmaceutical Services, Inc.WST	22,749	7.3x	6.7x
Illumina, Inc.ILMN	21,466	5.2x	4.9x
STERIS plcSTE	20,974	4.2x	4.2x
Labcorp Holdings Inc.LH	20,838	2.0x	1.9x
Quest Diagnostics IncorporatedDGX	20,743	2.5x	2.5x
Incyte CorporationINCY	19,691	3.2x	3.0x
Smith & Nephew plcSNN	12,825	2.5x	2.4x
Industry Median		4.7x	4.0x
(*) Revenue		8,232	8,555
= Enterprise Value		38,407	33,801
(-) Net Debt		6,927	6,927
Equity Value		31,480	26,874
(/) Outstanding shares		199	199
Fair Price		$158	$135

Selected Fair Value (avg of trailing + forward)

$146.84

+76.1%

PEG Fair Value

Fair Value

$211.94

Market Price

$83.37

Upside / Downside

+154.2%

Verdict

Undervalued

Using the PEG framework with analyst consensus forward EPS growth of 25.0% plus 1.2% dividend yield, the company has a fair value of $211.94 based on NTM EPS (FY2026) of $8.48. The current PEG ratio is 0.37.

PEG Ratio

0.37Deep Value

01.02.03.0+

PEG = P/E ÷ (Growth + Yield) = 9.8 ÷ (25.5% + 1.2%) = 0.37

PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.

Growth Category: Fast GrowerPEG moderately applicable

Growth above 25% is capped — hypergrowth may not be sustainable long-term.

Fair Value Calculation

EPS Growth RateForward	25.5%
Dividend Yield	+1.2%
Adjusted Growth (clamped 8–25%)Clamped	25.0%
Fair P/E	25.0x
NTM EPS (FY2026)	$8.48
Fair Value	$211.94

Growth Analysis

Forward GrowthActive

Period	EPS Est.	Growth	Analysts
FY2025 (actual)	$3.55	—	—
FY2026E	$8.48	+138.8%	20
FY2027E	$9.02	+6.4%	20
FY2028E	$9.67	+7.2%	18
FY2029E	$10.44	+8.0%	11
FY2030E	$11.07	+6.1%	9

5Y Forward EPS CAGR: 25.5%

Historical Growth

Year	Net Income	EPS	YoY
FY2021	$401.6M	$1.91	—
FY2022	$231.4M	$1.10	-42.4%
FY2023	$1.0B	$4.88	+343.6%
FY2024	$903.8M	$4.43	-9.2%
FY2025	$705.2M	$3.55	-19.9%

4Y Historical EPS CAGR: 16.8%

Earnings Power Value

Fair Value

$77.25

Market Price

$83.37

Upside / Downside

-7.3%

Verdict

Overvalued

Using the Earnings Power Value framework with a WACC of 7.6% and normalized earnings of $1.7B, the company has a fair value of $77.25 per share. The EPV range is $58.80 – $104.75 based on WACC sensitivity (6.1% – 9.1%).

Currency: USD Millions

	Low	Selected	High
Normalized Earnings	1,696	1,696	1,696
(/) WACC	9.1%	7.6%	6.1%
Enterprise Value	18,610	22,276	27,741
(-) Net debt	6,927	6,927	6,927
Equity Value	11,683	15,349	20,813
(/) Outstanding shares	199	199	199
Fair Price	$58.80	$77.25	$104.75

Dividend Discount Model

Fair Value

$14.41

Market Price

$83.37

Upside / Downside

-82.7%

Verdict

Overvalued

Using the Two-Stage Dividend Discount Model with a Cost of Equity of 9.6% and projected dividend growth of 3.5%, the fair value is $14.41 per share. The DDM range is $10.34 – $21.90 based on sensitivity analysis across Cost of Equity and growth rate assumptions.

Dividend Profile

Current DPS

$0.96

Dividend Yield

1.18%

Payout Ratio

27.0%

Dividend Coverage

3.71x

FCF Payout Ratio12.9%

DPS CAGR (4Y)0.2%

Historical Dividends Per Share

Year	DPS	Payout Ratio	YoY Growth
2025	$0.96	27.0%	-0.4%
2024	$0.96	21.7%	+0.3%
2023	$0.96	19.6%	+0.1%
2022	$0.96	86.9%	+0.6%
2021	$0.95	49.8%	—

Dividend Projections (5-Year)

Year	Projected DPS	Growth	Discount Factor	Present Value
2026	$0.99	3.5%	0.9122	$0.90
2027	$1.03	3.5%	0.8321	$0.85
2028	$1.06	3.5%	0.7591	$0.81
2029	$1.10	3.5%	0.6925	$0.76
2030	$1.14	3.5%	0.6317	$0.72
Terminal Value	$1.17 DPS	2.5%		$10.36

PV of Projected Dividends$4.05

PV of Terminal Value$10.36

Fair Value per Share$14.41

Sensitivity Analysis

Fair value under different Cost of Equity (rows) and DPS Growth Rate (columns) assumptions.

Ke \ Growth	1.5%	2.5%	3.5%	4.5%	5.5%
7.6%	$18	$19	$20	$21	$22
8.6%	$15	$16	$17	$18	$18
9.6%	$13	$14	$14	$15	$16
10.6%	$12	$12	$13	$13	$14
11.6%	$10	$11	$11	$12	$12

Disclaimer: Sweet Value Lab provides estimated intrinsic values for informational purposes only. This is not financial advice. All models rely on assumptions that may not reflect future performance. Always do your own research before making investment decisions.

Zimmer Biomet Holdings, Inc. (ZBH) Valuation Summary

Updated May 11, 2026 02:04

Model	Range	Fair Value	Upside
▸ Discounted Cash Flow
Growth Exit 5Y	$77.12 – $354.89	$134.77	+61.7%
Growth Exit 10Y	$87.69 – $370.06	$147.01	+76.3%
EBITDA Exit 5Y	$101.37 – $210.42	$151.44	+81.6%
EBITDA Exit 10Y	$105.50 – $231.27	$159.44	+91.2%
▸ Trading Multiples
P/E	$74.06 – $115.61	$136.36	+63.6%
EV/EBITDA	$103.70 – $193.97	$124.44	+49.3%
EV/Revenue	$69.70 – $266.70	$146.84	+76.1%
▸ PEG
PEG Fair Value	$211.94 – $211.94	$211.94	+154.2%
▸ Earnings Power Value
Earnings Power Value	$58.80 – $104.75	$77.25	-7.3%
▸ Dividend Discount
Dividend Discount	$10.34 – $21.90	$14.41	-82.7%

Valuation History

DCF Analysis

Fair Value

$134.77

Market Price

$83.37

Upside / Downside

+61.7%

Verdict

Undervalued

FCFF Present Value Calculation

WACC

7.61%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	1,802	1,868	1,941	2,038	2,116	2,169
(−) Net Interest	249	258	268	281	292	299
(+) D&A	269	301	321	309	307	315
EBITDA	2,320	2,427	2,530	2,629	2,716	2,784

(−) Tax	253	263	273	287	298	305
(−) CapEx	309	321	333	350	363	372
(−) ΔWC	-90	143	157	210	169	173
Free Cash Flow (FCFF)	1,848	1,701	1,767	1,782	1,887	1,934

Terminal Value						37,808
WACC / Discount Rate	7.6%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	1,781	1,523	1,471	1,378	1,356	26,196

Enterprise Value	33,706
Projection Period	7,510	22.3%
Terminal Value	26,196	77.7%

(−) Current Net Debt	6,927

Equity Value	26,778
(/) Outstanding Shares	199

Fair Price	$134.77

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
5.6%	$185	$210	$242	$288	$355
6.6%	$142	$157	$175	$199	$231
7.6%	$113	$123	$135	$149	$167
8.6%	$93	$99	$107	$117	$128
9.6%	$77	$82	$88	$94	$102

Current price: $83.37. Green = undervalued, Red = overvalued.

Fair Value

$147.01

Market Price

$83.37

Upside / Downside

+76.3%

Verdict

Undervalued

FCFF Present Value Calculation

WACC

7.61%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	1,802	1,868	1,941	2,038	2,116	2,211	2,304	2,394	2,480	2,561	2,625
(−) Net Interest	249	258	268	281	292	305	318	330	342	354	362
(+) D&A	269	301	321	309	307	335	349	364	380	395	405
EBITDA	2,320	2,427	2,530	2,629	2,716	2,852	2,971	3,088	3,202	3,310	3,393

(−) Tax	253	263	273	287	298	311	324	337	349	360	369
(−) CapEx	309	321	333	350	363	379	395	411	425	439	450
(−) ΔWC	-90	143	157	210	169	206	201	194	186	177	181
Free Cash Flow (FCFF)	1,848	1,701	1,767	1,782	1,887	1,956	2,051	2,147	2,241	2,333	2,392

Terminal Value											46,759
WACC / Discount Rate	7.6%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	1,781	1,523	1,471	1,378	1,356	1,306	1,273	1,238	1,201	1,162	22,447

Enterprise Value	36,138
Projection Period	13,691	37.9%
Terminal Value	22,447	62.1%

(−) Current Net Debt	6,927

Equity Value	29,210
(/) Outstanding Shares	199

Fair Price	$147.01

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
5.6%	$210	$233	$264	$307	$370
6.6%	$161	$175	$191	$213	$241
7.6%	$129	$137	$147	$159	$174
8.6%	$105	$111	$117	$125	$134
9.6%	$88	$92	$96	$101	$107

Current price: $83.37. Green = undervalued, Red = overvalued.

Fair Value

$151.44

Market Price

$83.37

Upside / Downside

+81.7%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Zimmer Biomet Holdings, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 3.9% to 3.8% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 71, DPO 56, DIO 368). At a 7.6% WACC with mid-year discounting, the terminal value (80% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 15.3x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $151.44 per share, suggesting ZBH is undervalued by 81.6% at the current price of $83.37.

FCFF Present Value Calculation

WACC

7.61%

3% – 20%

EV/EBITDA Exit Multiple

15.30x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	1,802	1,868	1,941	2,038	2,116	2,169
(−) Net Interest	249	258	268	281	292	299
(+) D&A	269	301	321	309	307	315
EBITDA	2,320	2,427	2,530	2,629	2,716	2,784

(−) Tax	253	263	273	287	298	—
(−) CapEx	309	321	333	350	363	—
(−) ΔWC	-90	143	157	210	169	—
Free Cash Flow (FCF)	1,848	1,701	1,767	1,782	1,887	—

Peers' EBITDA Multiple						15.3x
Terminal Value						42,590
WACC / Discount Rate	7.61%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	1,781	1,523	1,471	1,378	1,356	29,509

Enterprise Value	37,019
Projection Period	7,510	20.3%
Terminal Value	29,509	79.7%

(−) Current Net Debt	6,927
Equity Value	30,092
(÷) Outstanding Shares	199M
Fair Price	$151	+81.7%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	11.3x	13.3x	15.3x	17.3x	19.3x
5.6%	$125	$146	$168	$189	$210
6.6%	$119	$139	$159	$180	$200
7.6%	$113	$132	$151	$171	$190
8.6%	$107	$125	$144	$162	$181
9.6%	$101	$119	$137	$154	$172

Current price: $83.37. Green = undervalued, Red = overvalued.

Based on default parameters

Fair Value

$159.44

Market Price

$83.37

Upside / Downside

+91.2%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Zimmer Biomet Holdings, Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 3.9% to 3.3% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 71, DPO 56, DIO 368). At a 7.6% WACC with mid-year discounting, the terminal value (65% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 15.3x to Year 11 EBITDA. After subtracting net debt, the equity value implies a fair price of $159.44 per share, suggesting ZBH is undervalued by 91.2% at the current price of $83.37.

FCFF Present Value Calculation

WACC

7.61%

3% – 20%

EV/EBITDA Exit Multiple

15.30x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	1,802	1,868	1,941	2,038	2,116	2,211	2,304	2,394	2,480	2,561	2,625
(−) Net Interest	249	258	268	281	292	305	318	330	342	354	362
(+) D&A	269	301	321	309	307	335	349	364	380	395	405
EBITDA	2,320	2,427	2,530	2,629	2,716	2,852	2,971	3,088	3,202	3,310	3,393

(−) Tax	253	263	273	287	298	311	324	337	349	360	—
(−) CapEx	309	321	333	350	363	379	395	411	425	439	—
(−) ΔWC	-90	143	157	210	169	206	201	194	186	177	—
Free Cash Flow (FCF)	1,848	1,701	1,767	1,782	1,887	1,956	2,051	2,147	2,241	2,333	—

Peers' EBITDA Multiple											15.3x
Terminal Value											51,906
WACC / Discount Rate	7.61%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	1,781	1,523	1,471	1,378	1,356	1,306	1,273	1,238	1,201	1,162	24,917

Enterprise Value	38,608
Projection Period	13,691	35.5%
Terminal Value	24,917	64.5%

(−) Current Net Debt	6,927
Equity Value	31,681
(÷) Outstanding Shares	199M
Fair Price	$159	+91.2%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	11.3x	13.3x	15.3x	17.3x	19.3x
5.6%	$152	$172	$192	$211	$231
6.6%	$139	$157	$175	$193	$211
7.6%	$127	$143	$159	$176	$192
8.6%	$116	$131	$145	$160	$175
9.6%	$106	$119	$133	$146	$160

Current price: $83.37. Green = undervalued, Red = overvalued.

Based on default parameters

Trading Multiples

Fair Value

$136.36

Market Price

$83.37

Upside / Downside

+63.6%

Verdict

Undervalued

P/E Valuation — Medical - Devices

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing P/E	Forward P/E
Zimmer Biomet Holdings, Inc.ZBH	16,566	23.5x	9.8x
United Therapeutics CorporationUTHR	24,946	20.4x	19.8x
DexCom, Inc.DXCM	23,388	29.0x	23.5x
Waters CorporationWAT	22,846	32.6x	24.2x
West Pharmaceutical Services, Inc.WST	22,749	47.4x	37.6x
Illumina, Inc.ILMN	21,466	26.0x	27.2x
STERIS plcSTE	20,974	34.5x	24.8x
Labcorp Holdings Inc.LH	20,838	24.3x	14.1x
Quest Diagnostics IncorporatedDGX	20,743	21.4x	19.1x
Incyte CorporationINCY	19,691	15.4x	13.1x
Smith & Nephew plcSNN	12,825	20.9x	13.4x
Industry Median		25.2x	21.6x
(*) Profit after tax		705	1,685
Equity Value		17,745	36,443
(/) Outstanding shares		199	199
Fair Price		$89	$183

Selected Fair Value (avg of trailing + forward)

$136.36

+63.6%

Fair Value

$124.44

Market Price

$83.37

Upside / Downside

+49.3%

Verdict

Undervalued

EV/EBITDA Valuation — Medical - Devices

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/EBITDA	Forward EV/EBITDA
Zimmer Biomet Holdings, Inc.ZBH	16,566	10.6x	10.2x
United Therapeutics CorporationUTHR	24,946	12.9x	12.5x
DexCom, Inc.DXCM	23,388	20.5x	18.3x
Waters CorporationWAT	22,846	23.4x	11.5x
West Pharmaceutical Services, Inc.WST	22,749	30.9x	28.6x
Illumina, Inc.ILMN	21,466	19.9x	18.9x
STERIS plcSTE	20,974	16.9x	17.0x
Labcorp Holdings Inc.LH	20,838	13.7x	13.0x
Quest Diagnostics IncorporatedDGX	20,743	12.4x	12.5x
Incyte CorporationINCY	19,691	9.5x	8.7x
Smith & Nephew plcSNN	12,825	9.9x	9.3x
Industry Median		15.3x	12.8x
(*) EBITDA		2,217	2,304
= Enterprise Value		33,926	29,382
(-) Net Debt		6,927	6,927
Equity Value		26,999	22,455
(/) Outstanding shares		199	199
Fair Price		$136	$113

Selected Fair Value (avg of trailing + forward)

$124.44

+49.3%

Fair Value

$146.84

Market Price

$83.37

Upside / Downside

+76.1%

Verdict

Undervalued

EV/Revenue Valuation — Medical - Devices

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
Zimmer Biomet Holdings, Inc.ZBH	16,566	2.9x	2.7x
United Therapeutics CorporationUTHR	24,946	7.3x	7.2x
DexCom, Inc.DXCM	23,388	5.1x	4.6x
Waters CorporationWAT	22,846	7.5x	3.7x
West Pharmaceutical Services, Inc.WST	22,749	7.3x	6.7x
Illumina, Inc.ILMN	21,466	5.2x	4.9x
STERIS plcSTE	20,974	4.2x	4.2x
Labcorp Holdings Inc.LH	20,838	2.0x	1.9x
Quest Diagnostics IncorporatedDGX	20,743	2.5x	2.5x
Incyte CorporationINCY	19,691	3.2x	3.0x
Smith & Nephew plcSNN	12,825	2.5x	2.4x
Industry Median		4.7x	4.0x
(*) Revenue		8,232	8,555
= Enterprise Value		38,407	33,801
(-) Net Debt		6,927	6,927
Equity Value		31,480	26,874
(/) Outstanding shares		199	199
Fair Price		$158	$135

Selected Fair Value (avg of trailing + forward)

$146.84

+76.1%

PEG Fair Value

Fair Value

$211.94

Market Price

$83.37

Upside / Downside

+154.2%

Verdict

Undervalued

PEG Ratio

0.37Deep Value

01.02.03.0+

PEG = P/E ÷ (Growth + Yield) = 9.8 ÷ (25.5% + 1.2%) = 0.37

PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.

Growth Category: Fast GrowerPEG moderately applicable

Growth above 25% is capped — hypergrowth may not be sustainable long-term.

Fair Value Calculation

EPS Growth RateForward	25.5%
Dividend Yield	+1.2%
Adjusted Growth (clamped 8–25%)Clamped	25.0%
Fair P/E	25.0x
NTM EPS (FY2026)	$8.48
Fair Value	$211.94

Growth Analysis

Forward GrowthActive

Period	EPS Est.	Growth	Analysts
FY2025 (actual)	$3.55	—	—
FY2026E	$8.48	+138.8%	20
FY2027E	$9.02	+6.4%	20
FY2028E	$9.67	+7.2%	18
FY2029E	$10.44	+8.0%	11
FY2030E	$11.07	+6.1%	9

5Y Forward EPS CAGR: 25.5%

Historical Growth

Year	Net Income	EPS	YoY
FY2021	$401.6M	$1.91	—
FY2022	$231.4M	$1.10	-42.4%
FY2023	$1.0B	$4.88	+343.6%
FY2024	$903.8M	$4.43	-9.2%
FY2025	$705.2M	$3.55	-19.9%

4Y Historical EPS CAGR: 16.8%

Earnings Power Value

Fair Value

$77.25

Market Price

$83.37

Upside / Downside

-7.3%

Verdict

Overvalued

Currency: USD Millions

	Low	Selected	High
Normalized Earnings	1,696	1,696	1,696
(/) WACC	9.1%	7.6%	6.1%
Enterprise Value	18,610	22,276	27,741
(-) Net debt	6,927	6,927	6,927
Equity Value	11,683	15,349	20,813
(/) Outstanding shares	199	199	199
Fair Price	$58.80	$77.25	$104.75

Dividend Discount Model

Fair Value

$14.41

Market Price

$83.37

Upside / Downside

-82.7%

Verdict

Overvalued

Dividend Profile

Current DPS

$0.96

Dividend Yield

1.18%

Payout Ratio

27.0%

Dividend Coverage

3.71x

FCF Payout Ratio12.9%

DPS CAGR (4Y)0.2%

Historical Dividends Per Share

Year	DPS	Payout Ratio	YoY Growth
2025	$0.96	27.0%	-0.4%
2024	$0.96	21.7%	+0.3%
2023	$0.96	19.6%	+0.1%
2022	$0.96	86.9%	+0.6%
2021	$0.95	49.8%	—

Dividend Projections (5-Year)

Year	Projected DPS	Growth	Discount Factor	Present Value
2026	$0.99	3.5%	0.9122	$0.90
2027	$1.03	3.5%	0.8321	$0.85
2028	$1.06	3.5%	0.7591	$0.81
2029	$1.10	3.5%	0.6925	$0.76
2030	$1.14	3.5%	0.6317	$0.72
Terminal Value	$1.17 DPS	2.5%		$10.36

PV of Projected Dividends$4.05

PV of Terminal Value$10.36

Fair Value per Share$14.41

Sensitivity Analysis

Fair value under different Cost of Equity (rows) and DPS Growth Rate (columns) assumptions.

Ke \ Growth	1.5%	2.5%	3.5%	4.5%	5.5%
7.6%	$18	$19	$20	$21	$22
8.6%	$15	$16	$17	$18	$18
9.6%	$13	$14	$14	$15	$16
10.6%	$12	$12	$13	$13	$14
11.6%	$10	$11	$11	$12	$12