Zimmer Biomet Holdings, Inc. (ZBH) DCF Valuation
TGM's two-stage DCF values Zimmer Biomet Holdings, Inc. (ZBH) between $61.59 and $153.75 depending on assumptions, with a base case of $97.05. Growth is taken from the company's own record (5-year revenue CAGR (FCF growth too volatile to use)), fading to 2.5% long-run; the discount rate (7.5%) reflects its beta.
What would today's price require?
$87.97 is justified only if free cash flow grows about +2.6% a year (fading to 2.5% long-run) at a 7.5% required return — slower than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 1.2%/yr | 8.5% | $61.59 |
| Base case | 4.2%/yr | 7.5% | $97.05 |
| Optimistic | 7.2%/yr | 6.5% | $153.75 |
| Analyst DCF (FMP) | independent reference — different model | $490.79 | |
Current Price
$87.97
Market-Implied Growth
+2.6%/yr
vs +15.4% 5Y actual
Model Scenario Range
$61.59 – $153.75
model output — not a price target
ZBH DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for ZBH (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $1.2B · 0.19B shares · net debt $6.9B
Estimated Fair Value
$105.49
+19.9% vs $87.97
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 4.2%/yr FCF growth and 10-year horizon fixed. Green = above today's $87.97; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 5.5% | $155 | $175 | $202 | $240 | $296 |
| 6.5% | $116 | $127 | $142 | $160 | $185 |
| 7.5% | $89.69 | $96.87 | $105 | $116 | $129 |
| 8.5% | $70.99 | $75.78 | $81.37 | $87.98 | $95.90 |
| 9.5% | $57.01 | $60.35 | $64.18 | $68.59 | $73.73 |
About Zimmer Biomet Holdings, Inc.
Zimmer Biomet Holdings, Inc. (ZBH), along with its global subsidiaries, operates as a leading player in the musculoskeletal healthcare sector. The company extends its reach across the Americas, Europe, the Middle East, Africa, and the Asia Pacific region. ZBH is responsible for the design, manufacturing, and marketing of a wide array of orthopedic reconstructive solutions, including prominent knee and hip replacement systems. Their offerings also encompass Specialized Enabling Technologies (S.E.T.) products, which cover areas such as sports medicine, biologics, foot and ankle care, extremity treatments, and trauma management. Furthermore, the company provides medical devices and surgical instruments specifically for spinal conditions, alongside products for facial and cranial reconstruction. A unique part of their portfolio includes systems designed to stabilize and fixate chest bones, facilitating recovery or reconstruction following open-heart surgery, traumatic injuries, or congenital chest deformities. The company's product lines also feature a comprehensive range of dental solutions, such as reconstructive implants, prosthetics, and regenerative materials. Additionally, they are involved in robotic surgical systems, general surgical instruments, and bone cements. These advanced products and solutions are primarily utilized to address conditions in patients suffering from disorders or injuries affecting bones, joints, and their associated soft tissues. Zimmer Biomet caters to a broad clientele, including orthopedic, neuro-, and oral surgeons, dentists, hospitals, independent distributors, healthcare suppliers, and various other medical specialists. Their network further encompasses agents, healthcare purchasing organizations, and group buying alliances. Originally established in 1927, the enterprise was initially known as Zimmer Holdings, Inc., before rebranding as Zimmer Biomet Holdings, Inc. in June 2015. Its corporate headquarters are situated in Warsaw, Indiana.
- Sector
- Healthcare
- Industry
- Medical - Devices
- CEO
- Ivan Tornos