Zimmer Biomet’s latest quarter drew a positive market response, reflecting broad-based growth across most business lines despite continued pressure in the knee franchise. Management attributed the company’s performance to upper single-digit or double-digit gains in hips, S.E.T. (sports medicine, extremities, and trauma), and technology and data, with CEO Ivan Tornos highlighting the success of new product cycles and commercial execution improvements. Notably, expansion in robotics and the integration of Paragon 28 drove significant momentum, helping to counter expected declines in knees and ongoing headwinds in China.
Is now the time to buy ZBH? Find out in our full research report (it’s free for active Edge members).
Zimmer Biomet (ZBH) Q3 2026 highlights:
- Revenue $2.06 billion vs S&P analysts’ estimates of $2.04 billion (3.1% year-on-year growth, 1.1% beat)
- Adjusted EPS $1.90 vs S&P analysts’ estimates of $1.88 (1% beat)
- Adjusted EPS guidance Management slightly raised its full-year adjusted EPS guidance to $8.55 at the midpoint
- Operating margin 14.9%, down from 17.6% in the same quarter last year
- Constant currency revenue rose 3.7% year on year (8.6% in the same quarter last year)
- Market capitalization $20.22 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is 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 from Zimmer Biomet’s Q3 earnings call
- Mathew Blackman (TD Cowen) asked about the sustainability of hip and S.E.T. growth and the turnaround path for knees. CEO Ivan Tornos described non-knee franchises as sustainable and highlighted commercial execution initiatives and innovation aimed at improving knee performance.
- Rick Wise (Stifel) inquired about macro procedural volume trends and whether the company sees signs of market slowdown. Tornos countered competitor concerns, citing steady cancellation rates and price stability, and emphasized the company’s diverse growth engines.
- Patrick Wood (UBS) sought details on Monogram’s go-to-market strategy and initial rollout. Tornos outlined a multi-segment approach targeting surgeons not currently using robotics and emphasized safety, efficiency, and ease of use as key selling points.
- Vijay Kumar (Evercore ISI) questioned the factors supporting better growth in 2027 versus 2026. Tornos pointed to the anniversary of China headwinds, a full-year Paragon 28 contribution, and Monogram’s launch as major tailwinds.
- Chris Pasquale (Barclays) asked about risks and learnings in the U.S. sales force reorganization. Tornos acknowledged that the riskiest phase remains but noted lower-than-expected disruption so far and highlighted investments and leadership changes to mitigate risk.
Catalysts in upcoming quarters
In the coming quarters, the StockStory team will be watching (1) progress on the FDA submission and the timing and outcome of regulatory review for the Monogram robotic system, (2) completion and impact of the U.S. sales force transformation on knee and overall franchise growth, and (3) execution of operational improvement initiatives, including manufacturing consolidation and the implementation of AI capabilities. Additional drivers include the continued integration and performance of Paragon 28 and new product rollouts within S.E.T. and technology segments.
Zimmer Biomet currently trades at $106.85, up from $97.09 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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