Initiate at Mkt: Hips (And Knees) Don't Lie, but Execution Still the Swing Factor

Research evidence excerpt

Initiate at Mkt: Hips (And Knees) Don't Lie, but Execution Still the Swing Factor

July 8, 2026 | 16:02 ET~

Zimmer Biomet

ZBH-NYSE Rating Price: Jul-7 Target Total Rtn Medical Supplies & Devices

Market Perform $89.41 $95.00 7%

Vik Chopra Analyst

vik.chopra@bmo.com (917) 581-0141

Legal Entity: BMO Capital Markets Corp.

Initiate at Mkt: Hips (And Knees) Don't Lie, but

2YR Price Volume Chart

130Execution Still the Swing Factor

Bottom Line: 110

We initiate ZBH with a Market Perform rating and $95 target price. The company is 100 15

converting its U.S. salesforce from part-time 1099 reps to dedicated W-2 employees. 90 10

Management has identified a productivity gap versus competitors, which we think will 80 5

take time to close and see execution as critical. Valuation appears attractive, but we 70 Jan Jul Jan Jul 0

would like to see consistent execution and margin stabilization. Additionally, we think LHS: Price ($) / RHS: Volume (mm) Source: FactSet

the recent CFO departure introduces incremental uncertainty. We see ZBH as a show-me Company Data in $

story for now and view our Market Perform rating as appropriate. Dividend $0.96 Shares O/S (mm) 193.5

Yield 1.1% Market Cap (mm) $17,297

Key Points

EV (mm) $24,415 52-Week Low $79

Salesforce transformation comes with execution risk. Zimmer's conversion from BMO Estimates in $

1099 representatives (averaging 7 cases/week) to dedicated W-2 employees (targeting

(FY-Dec.) 2025A 2026E 2027E

14-16 cases/week) makes sense to us, but is operationally unproven at scale. While

EPS $8.20 $8.47 $8.98early converted territories show double-digit case growth, this sample size is limited

and early results may not persist as ZBH converts lower-performing territories and faces Revenue $8,232 $8,531 $8,815

increased competitive poaching.