Intrinsic value of Zimmer Biomet Holdings - ZBH

Previous Close

$113.54

  Intrinsic Value

$46.02

stock screener

  Rating & Target

str. sell

-59%

Previous close

$113.54

 
Intrinsic value

$46.02

 
Up/down potential

-59%

 
Rating

str. sell

We calculate the intrinsic value of ZBH stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 23.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  28.11
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  7,684
  7,838
  8,018
  8,224
  8,455
  8,712
  8,993
  9,299
  9,631
  9,988
  10,371
  10,781
  11,219
  11,685
  12,180
  12,705
  13,262
  13,851
  14,475
  15,133
  15,829
  16,562
  17,336
  18,152
  19,011
  19,916
  20,869
  21,872
  22,927
  24,038
  25,206
Variable operating expenses, $m
 
  6,147
  6,264
  6,397
  6,548
  6,714
  6,896
  7,095
  7,310
  7,541
  7,790
  6,991
  7,275
  7,577
  7,898
  8,239
  8,600
  8,982
  9,387
  9,814
  10,265
  10,740
  11,242
  11,771
  12,328
  12,915
  13,533
  14,183
  14,868
  15,588
  16,345
Fixed operating expenses, $m
 
  851
  872
  894
  916
  939
  963
  987
  1,011
  1,037
  1,062
  1,089
  1,116
  1,144
  1,173
  1,202
  1,232
  1,263
  1,295
  1,327
  1,360
  1,394
  1,429
  1,465
  1,501
  1,539
  1,577
  1,617
  1,657
  1,699
  1,741
Total operating expenses, $m
  6,858
  6,998
  7,136
  7,291
  7,464
  7,653
  7,859
  8,082
  8,321
  8,578
  8,852
  8,080
  8,391
  8,721
  9,071
  9,441
  9,832
  10,245
  10,682
  11,141
  11,625
  12,134
  12,671
  13,236
  13,829
  14,454
  15,110
  15,800
  16,525
  17,287
  18,086
Operating income, $m
  826
  840
  882
  933
  992
  1,059
  1,134
  1,218
  1,310
  1,410
  1,519
  2,701
  2,827
  2,963
  3,109
  3,264
  3,430
  3,606
  3,794
  3,993
  4,204
  4,428
  4,665
  4,916
  5,182
  5,462
  5,759
  6,072
  6,402
  6,751
  7,119
EBITDA, $m
  1,865
  2,448
  2,503
  2,568
  2,643
  2,728
  2,822
  2,927
  3,042
  3,167
  3,303
  3,449
  3,606
  3,774
  3,954
  4,145
  4,350
  4,567
  4,798
  5,042
  5,302
  5,577
  5,868
  6,175
  6,500
  6,844
  7,206
  7,589
  7,993
  8,419
  8,868
Interest expense (income), $m
  0
  373
  385
  398
  414
  431
  450
  471
  494
  519
  546
  574
  605
  638
  673
  710
  749
  791
  835
  882
  931
  983
  1,038
  1,096
  1,157
  1,221
  1,289
  1,360
  1,435
  1,514
  1,597
Earnings before tax, $m
  400
  467
  497
  535
  578
  628
  684
  747
  816
  891
  973
  2,126
  2,222
  2,325
  2,436
  2,554
  2,681
  2,815
  2,959
  3,111
  3,273
  3,445
  3,627
  3,820
  4,025
  4,241
  4,470
  4,712
  4,967
  5,237
  5,522
Tax expense, $m
  95
  126
  134
  144
  156
  170
  185
  202
  220
  241
  263
  574
  600
  628
  658
  690
  724
  760
  799
  840
  884
  930
  979
  1,031
  1,087
  1,145
  1,207
  1,272
  1,341
  1,414
  1,491
Net income, $m
  306
  341
  363
  390
  422
  458
  499
  545
  595
  651
  710
  1,552
  1,622
  1,698
  1,778
  1,865
  1,957
  2,055
  2,160
  2,271
  2,389
  2,515
  2,648
  2,789
  2,938
  3,096
  3,263
  3,439
  3,626
  3,823
  4,031

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  634
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  26,684
  26,568
  27,179
  27,878
  28,662
  29,531
  30,485
  31,523
  32,647
  33,857
  35,157
  36,547
  38,030
  39,609
  41,288
  43,069
  44,956
  46,954
  49,067
  51,299
  53,656
  56,143
  58,766
  61,531
  64,444
  67,512
  70,742
  74,142
  77,720
  81,484
  85,443
Adjusted assets (=assets-cash), $m
  26,050
  26,568
  27,179
  27,878
  28,662
  29,531
  30,485
  31,523
  32,647
  33,857
  35,157
  36,547
  38,030
  39,609
  41,288
  43,069
  44,956
  46,954
  49,067
  51,299
  53,656
  56,143
  58,766
  61,531
  64,444
  67,512
  70,742
  74,142
  77,720
  81,484
  85,443
Revenue / Adjusted assets
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
Average production assets, $m
  10,816
  11,035
  11,289
  11,579
  11,905
  12,266
  12,662
  13,093
  13,560
  14,063
  14,603
  15,180
  15,796
  16,452
  17,149
  17,889
  18,673
  19,503
  20,380
  21,308
  22,287
  23,320
  24,409
  25,558
  26,767
  28,042
  29,383
  30,796
  32,282
  33,845
  35,490
Working capital, $m
  2,282
  2,265
  2,317
  2,377
  2,444
  2,518
  2,599
  2,687
  2,783
  2,887
  2,997
  3,116
  3,242
  3,377
  3,520
  3,672
  3,833
  4,003
  4,183
  4,374
  4,574
  4,787
  5,010
  5,246
  5,494
  5,756
  6,031
  6,321
  6,626
  6,947
  7,284
Total debt, $m
  11,241
  10,991
  11,376
  11,817
  12,312
  12,860
  13,462
  14,117
  14,826
  15,590
  16,410
  17,287
  18,223
  19,219
  20,279
  21,402
  22,593
  23,854
  25,187
  26,596
  28,083
  29,653
  31,308
  33,052
  34,890
  36,826
  38,864
  41,010
  43,267
  45,642
  48,141
Total liabilities, $m
  17,016
  16,765
  17,150
  17,591
  18,086
  18,634
  19,236
  19,891
  20,600
  21,364
  22,184
  23,061
  23,997
  24,993
  26,053
  27,176
  28,367
  29,628
  30,961
  32,370
  33,857
  35,427
  37,082
  38,826
  40,664
  42,600
  44,638
  46,784
  49,041
  51,416
  53,915
Total equity, $m
  9,669
  9,804
  10,029
  10,287
  10,576
  10,897
  11,249
  11,632
  12,047
  12,493
  12,973
  13,486
  14,033
  14,616
  15,235
  15,892
  16,589
  17,326
  18,106
  18,929
  19,799
  20,717
  21,685
  22,705
  23,780
  24,912
  26,104
  27,358
  28,679
  30,068
  31,528
Total liabilities and equity, $m
  26,685
  26,569
  27,179
  27,878
  28,662
  29,531
  30,485
  31,523
  32,647
  33,857
  35,157
  36,547
  38,030
  39,609
  41,288
  43,068
  44,956
  46,954
  49,067
  51,299
  53,656
  56,144
  58,767
  61,531
  64,444
  67,512
  70,742
  74,142
  77,720
  81,484
  85,443
Debt-to-equity ratio
  1.163
  1.120
  1.130
  1.150
  1.160
  1.180
  1.200
  1.210
  1.230
  1.250
  1.260
  1.280
  1.300
  1.310
  1.330
  1.350
  1.360
  1.380
  1.390
  1.400
  1.420
  1.430
  1.440
  1.460
  1.470
  1.480
  1.490
  1.500
  1.510
  1.520
  1.530
Adjusted equity ratio
  0.347
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369
  0.369

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  306
  341
  363
  390
  422
  458
  499
  545
  595
  651
  710
  1,552
  1,622
  1,698
  1,778
  1,865
  1,957
  2,055
  2,160
  2,271
  2,389
  2,515
  2,648
  2,789
  2,938
  3,096
  3,263
  3,439
  3,626
  3,823
  4,031
Depreciation, amort., depletion, $m
  1,039
  1,608
  1,621
  1,635
  1,651
  1,669
  1,688
  1,709
  1,732
  1,757
  1,784
  748
  778
  810
  845
  881
  920
  961
  1,004
  1,050
  1,098
  1,149
  1,202
  1,259
  1,319
  1,381
  1,447
  1,517
  1,590
  1,667
  1,748
Funds from operations, $m
  1,933
  1,949
  1,984
  2,025
  2,073
  2,127
  2,188
  2,254
  2,328
  2,408
  2,494
  2,300
  2,400
  2,508
  2,623
  2,746
  2,877
  3,016
  3,164
  3,321
  3,487
  3,664
  3,850
  4,048
  4,257
  4,477
  4,710
  4,956
  5,216
  5,490
  5,779
Change in working capital, $m
  301
  44
  52
  60
  67
  74
  81
  89
  96
  103
  111
  119
  126
  135
  143
  152
  161
  170
  180
  190
  201
  212
  224
  236
  248
  262
  275
  290
  305
  321
  338
Cash from operations, $m
  1,632
  1,904
  1,932
  1,965
  2,006
  2,053
  2,106
  2,166
  2,232
  2,304
  2,383
  2,182
  2,274
  2,373
  2,480
  2,594
  2,716
  2,846
  2,984
  3,131
  3,286
  3,452
  3,627
  3,812
  4,008
  4,216
  4,435
  4,667
  4,911
  5,169
  5,442
Maintenance CAPEX, $m
  0
  -533
  -544
  -556
  -570
  -586
  -604
  -624
  -645
  -668
  -693
  -719
  -748
  -778
  -810
  -845
  -881
  -920
  -961
  -1,004
  -1,050
  -1,098
  -1,149
  -1,202
  -1,259
  -1,319
  -1,381
  -1,447
  -1,517
  -1,590
  -1,667
New CAPEX, $m
  -530
  -219
  -254
  -290
  -326
  -361
  -396
  -431
  -467
  -503
  -540
  -577
  -616
  -656
  -697
  -740
  -784
  -830
  -878
  -927
  -979
  -1,033
  -1,089
  -1,148
  -1,210
  -1,274
  -1,342
  -1,412
  -1,486
  -1,563
  -1,644
Cash from investing activities, $m
  -1,692
  -752
  -798
  -846
  -896
  -947
  -1,000
  -1,055
  -1,112
  -1,171
  -1,233
  -1,296
  -1,364
  -1,434
  -1,507
  -1,585
  -1,665
  -1,750
  -1,839
  -1,931
  -2,029
  -2,131
  -2,238
  -2,350
  -2,469
  -2,593
  -2,723
  -2,859
  -3,003
  -3,153
  -3,311
Free cash flow, $m
  -60
  1,152
  1,134
  1,119
  1,110
  1,106
  1,106
  1,111
  1,120
  1,134
  1,151
  885
  910
  939
  972
  1,010
  1,051
  1,096
  1,145
  1,199
  1,258
  1,321
  1,389
  1,461
  1,539
  1,623
  1,712
  1,807
  1,908
  2,016
  2,130
Issuance/(repayment) of debt, $m
  -260
  326
  386
  441
  495
  548
  602
  655
  709
  764
  820
  877
  936
  997
  1,059
  1,124
  1,191
  1,261
  1,333
  1,409
  1,487
  1,569
  1,655
  1,745
  1,838
  1,936
  2,038
  2,145
  2,258
  2,375
  2,498
Issuance/(repurchase) of shares, $m
  -416
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -555
  326
  386
  441
  495
  548
  602
  655
  709
  764
  820
  877
  936
  997
  1,059
  1,124
  1,191
  1,261
  1,333
  1,409
  1,487
  1,569
  1,655
  1,745
  1,838
  1,936
  2,038
  2,145
  2,258
  2,375
  2,498
Total cash flow (excl. dividends), $m
  -637
  1,478
  1,520
  1,560
  1,605
  1,654
  1,708
  1,766
  1,829
  1,898
  1,971
  1,762
  1,846
  1,936
  2,031
  2,133
  2,242
  2,357
  2,479
  2,608
  2,745
  2,890
  3,044
  3,206
  3,377
  3,559
  3,750
  3,952
  4,166
  4,391
  4,628
Retained Cash Flow (-), $m
  219
  -193
  -225
  -258
  -289
  -321
  -352
  -383
  -415
  -447
  -479
  -513
  -547
  -583
  -619
  -657
  -696
  -737
  -780
  -824
  -870
  -918
  -968
  -1,020
  -1,075
  -1,132
  -1,192
  -1,255
  -1,320
  -1,389
  -1,461
Prev. year cash balance distribution, $m
 
  58
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  1,343
  1,294
  1,302
  1,315
  1,333
  1,356
  1,383
  1,415
  1,451
  1,491
  1,249
  1,299
  1,353
  1,412
  1,476
  1,545
  1,619
  1,699
  1,784
  1,875
  1,972
  2,076
  2,186
  2,303
  2,427
  2,558
  2,698
  2,845
  3,002
  3,167
Discount rate, %
 
  8.70
  9.14
  9.59
  10.07
  10.57
  11.10
  11.66
  12.24
  12.85
  13.50
  14.17
  14.88
  15.62
  16.41
  17.23
  18.09
  18.99
  19.94
  20.94
  21.98
  23.08
  24.24
  25.45
  26.72
  28.06
  29.46
  30.93
  32.48
  34.11
  35.81
PV of cash for distribution, $m
 
  1,235
  1,087
  989
  896
  807
  721
  639
  562
  489
  420
  291
  246
  205
  168
  136
  108
  84
  64
  48
  35
  25
  18
  12
  8
  5
  3
  2
  1
  1
  0
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Zimmer Biomet Holdings, Inc. is engaged in designing, manufacturing and marketing of orthopedic reconstructive products; sports medicine, biologics, extremities and trauma products; office-based technologies; spine, craniomaxillofacial and thoracic products; dental implants, and related surgical products. The Company's products and solutions help treat patients suffering from disorders of, or injuries to, bones, joints or supporting soft tissues. The Company manages its operations through three geographic operating segments: the Americas, consisting principally of the United States and other North, Central and South American markets; EMEA, consisting principally of Europe and the Middle East and African markets, and Asia Pacific, consisting primarily of Japan and other Asian and Pacific markets. The Company's product category segments include Americas Spine, Office Based Technologies, Craniomaxillofacial and Thoracic (CMF), and Dental.

FINANCIAL RATIOS  of  Zimmer Biomet Holdings (ZBH)

Valuation Ratios
P/E Ratio 74.4
Price to Sales 3
Price to Book 2.4
Price to Tangible Book
Price to Cash Flow 14
Price to Free Cash Flow 20.7
Growth Rates
Sales Growth Rate 28.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 22.1%
Cap. Spend. - 3 Yr. Gr. Rate 12.6%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 110.3%
Total Debt to Equity 116.3%
Interest Coverage 0
Management Effectiveness
Return On Assets 1.1%
Ret/ On Assets - 3 Yr. Avg. 3.1%
Return On Total Capital 1.4%
Ret/ On T. Cap. - 3 Yr. Avg. 3.8%
Return On Equity 3.1%
Return On Equity - 3 Yr. Avg. 5.4%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 69%
Gross Margin - 3 Yr. Avg. 70.8%
EBITDA Margin 18.7%
EBITDA Margin - 3 Yr. Avg. 20.4%
Operating Margin 10.7%
Oper. Margin - 3 Yr. Avg. 13.6%
Pre-Tax Margin 5.2%
Pre-Tax Margin - 3 Yr. Avg. 9.3%
Net Profit Margin 4%
Net Profit Margin - 3 Yr. Avg. 7.3%
Effective Tax Rate 23.8%
Eff/ Tax Rate - 3 Yr. Avg. 17.3%
Payout Ratio 61.4%

ZBH stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ZBH stock intrinsic value calculation we used $7684 million for the last fiscal year's total revenue generated by Zimmer Biomet Holdings. The default revenue input number comes from 2016 income statement of Zimmer Biomet Holdings. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ZBH stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 8.7%, whose default value for ZBH is calculated based on our internal credit rating of Zimmer Biomet Holdings, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Zimmer Biomet Holdings.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ZBH stock the variable cost ratio is equal to 78.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $830 million in the base year in the intrinsic value calculation for ZBH stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Zimmer Biomet Holdings.

Corporate tax rate of 27% is the nominal tax rate for Zimmer Biomet Holdings. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ZBH stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ZBH are equal to 140.8%.

Life of production assets of 20.3 years is the average useful life of capital assets used in Zimmer Biomet Holdings operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ZBH is equal to 28.9%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $9669 million for Zimmer Biomet Holdings - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 202.207 million for Zimmer Biomet Holdings is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Zimmer Biomet Holdings at the current share price and the inputted number of shares is $23.0 billion.

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COMPANY NEWS

▶ New Strong Sell Stocks for December 12th   [Dec-12-17 09:44AM  Zacks]
▶ New Strong Sell Stocks for November 20th   [Nov-20-17 08:18AM  Zacks]
▶ Whats behind Zimmer Biomets Recent Stock Downtrend?   [Nov-14-17 09:00AM  Market Realist]
▶ Ankle Replacements Take Off as Devices Appear Durable   [12:19AM  The Wall Street Journal]
▶ Asia-Pacific Still Zimmer Biomets Strongest Geography   [Nov-10-17 10:31AM  Market Realist]
▶ Estee Lauder, US Steel jump but Envision Healthcare tumbles   [Nov-01-17 04:29PM  Associated Press]
▶ Zimmer misses Street 3Q forecasts   [07:29AM  Associated Press]
▶ Mass confusion over Obamacare plans   [Oct-20-17 10:11AM  Yahoo Finance Video]
▶ How Has ZBH Stock Performed Recently?   [Sep-21-17 09:10AM  Market Realist]
▶ Whats Behind the Recent Slump in ZBH Stock Price?   [Sep-01-17 10:37AM  Market Realist]
▶ Behind Zimmer Biomets 2Q17 Revenue Fall   [10:39AM  Market Realist]
▶ New Strong Sell Stocks for August 14th   [Aug-14-17 08:02AM  Zacks]
▶ Moody's assigns B2 to Lima, stable outlook   [Jul-31-17 12:07PM  Moody's]
▶ Zimmer misses 2Q profit forecasts   [Jul-27-17 04:31PM  Associated Press]
▶ Stryker Won the Patent Case against Zimmer Biomet Holdings   [Jul-21-17 09:11AM  Market Realist]
▶ Jana Partners Cleans Up, Exits Whole Foods Stake   [Jul-20-17 09:47AM  Barrons.com]
▶ The Best Stock in Indiana: Zimmer Biomet   [Jul-18-17 03:50PM  Kiplinger]
▶ Zimmer Biomet: Cramer's Top Takeaways   [06:25AM  TheStreet.com]
▶ Medtech CEO Hits 'Third Strike,' Steps Down On Q2 Disappointment   [Jul-12-17 04:50PM  Investor's Business Daily]
▶ Analysts Applaud Zimmer CEO Departure   [10:01AM  Barrons.com]
▶ Zimmer Biomet shares slide on CEO departure, outlook   [Jul-11-17 04:51PM  MarketWatch]
▶ [$$] Hans Zimmer, Movie Maestro   [Jul-07-17 10:53PM  The Wall Street Journal]
▶ Zimmer Biomets Latest Analyst Recommendations: Mostly Buy   [Jul-03-17 09:08AM  Market Realist]
▶ Inside Zimmer Biomets Latest Dividend Payment   [07:39AM  Market Realist]
Financial statements of ZBH
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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