Valued at $22.1 billion by market cap, Zimmer Biomet Holdings, Inc. (ZBH) is a medical technology company specializing in designing, manufacturing, and marketing orthopedic reconstructive products. The Warsaw, Indiana-situated company caters to orthopedic surgeons, neurosurgeons, hospitals, and healthcare distributors.

The medical device giant has struggled to keep up with the broader market over the past year. Over the past 52 weeks, ZBH dipped 2.9% compared to the S&P 500 Index’s ($SPX) 30.1% returns. In 2024 alone, ZBH is down 10.2% versus SPX’s 24.1% gains on a YTD basis.

Narrowing the focus, ZBH has also underperformed the Ishares U.S. Medical Devices ETF’s (IHI) 21.7% returns over the past 52 weeks and 11.1% gains on a YTD basis.

ZBH shares rose 5.7% after releasing its Q3 earnings report. It reported adjusted earnings of $1.74 per share, missing Wall Street’s estimate of $1.75. However, revenue for the quarter totaled $1.82 billion, exceeding the $1.8 billion forecast. The company expects full-year earnings between $7.95 and $8.05 per share.

For the current fiscal year, ending in December, analysts expect Zimmer Biomet to report an EPS growth of 5.8% year over year to $7.99. Moreover, the company’s earnings surprise history is mixed. It beat the consensus estimates in three of the last four quarters, while missing on another occasion. 

Among the 28 analysts covering the ZBH stock, the consensus rating is a “Moderate Buy.” That’s based on seven “Strong Buy” ratings, two “Moderate Buys,” 17 “Holds,” and two “Strong Sells.”

This configuration has been stable over the past years.

On November 4, RBC Capital raised Zimmer Biomet's price target to $125, aligning with the market’s average target, up from $120, and reiterated its "Outperform" rating. The firm views Q3 as the company's low point, with upside potential ahead, and emphasizes its focus on innovation and M&A as key strengths.

ZBH’s Street-high target of $150 indicates a potential upside of 37.3% on the current market prices.