Zimmer Biomet’s first quarter results were met with a sharp negative reaction from the market, as investors weighed both the modest revenue growth and a lowered outlook for the year. Management attributed the quarter’s performance to strong adoption of new hip products in the U.S. and sustained mid-single-digit growth in its S.E.T. (Sports Medicine, Extremities and Trauma) segment, despite facing a headwind from one less selling day. CEO Ivan Tornos highlighted the impact of Zimmer Biomet’s "magnificent seven" product cycle, stating that U.S. hip growth was driven by "rapid uptake from both existing customers and conversions from competitive accounts." Cautious commentary surrounded U.S. knees, with Tornos admitting that "nobody here is pleased with 0.2% growth in the quarter," but expressing confidence in improving trends for the segment as the year progresses.
Is now the time to buy ZBH? Find out in our full research report (it’s free).
Zimmer Biomet (ZBH) Q1 CY2025 Highlights:
- Revenue: $1.91 billion vs analyst estimates of $1.89 billion (1.1% year-on-year growth, 0.7% beat)
- Adjusted EPS: $1.81 vs analyst estimates of $1.77 (2.3% beat)
- Adjusted EBITDA: $754.9 million vs analyst estimates of $603.5 million (39.5% margin, 25.1% beat)
- Management lowered its full-year Adjusted EPS guidance to $8 at the midpoint, a 3% decrease
- Operating Margin: 15.3%, up from 14.1% in the same quarter last year
- Constant Currency Revenue rose 2.3% year on year (4.4% in the same quarter last year)
- Market Capitalization: $18.36 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Zimmer Biomet’s Q1 Earnings Call
-
Robbie Marcus (JPMorgan) asked how Zimmer Biomet is offsetting the anticipated tariff headwinds, and CFO Suketu Upadhyay detailed mitigation efforts like country-of-origin optimization and discretionary spending cuts, but said the 2025 impact should not be used as a 2026 baseline.
-
David Roman (Goldman Sachs) questioned when new product launches would translate into higher organic growth, and CEO Ivan Tornos replied that "the second half of 2025 is mid-single-digit growth based on easier comps and product launches."
-
Matthew O'Brien (Piper Sandler) probed about pricing trends, noting a step down in pricing tailwinds. Upadhyay responded that while 2024 saw one-time international factors, pricing should remain flat in 2025, supported by new product value and improved field discipline.
-
Larry Biegelsen (Wells Fargo) asked about U.S. knee growth lagging competitors, and Tornos acknowledged the need for better execution, highlighting upcoming launches (ROSA Knee V15) and increased investment in U.S. sales leadership.
-
Caitlin Cronin (Canaccord Genuity) inquired about Paragon 28 integration, to which Tornos reported "minimal disruption" and full retention of leadership and sales teams, calling the acquisition on track and strategically important.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be focused on (1) signs that U.S. knee growth accelerates as new products ramp up, (2) the ongoing effectiveness of tariff mitigation efforts and their impact on margins, and (3) the successful integration and growth trajectory of Paragon 28 within the broader S.E.T. portfolio. Additional attention will be paid to the company’s ability to maintain pricing discipline and deliver operational improvements in core U.S. markets.
Zimmer Biomet currently trades at $91.74, down from $102.38 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).
High-Quality Stocks for All Market Conditions
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
