DCF Tool

ZBH

Zimmer Biomet Holdings Inc – Surgical and Medical Instrument Manufacturing
Founded in 1927 and headquartered in Warsaw, Indiana, Zimmer Biomet is a global leader in musculoskeletal healthcare. It designs, manufactures and markets orthopedic reconstructive products; sports medicine, biologics, extremities and trauma products; office-based technologies; spine, craniomaxillofacial and thoracic products; dental implants; and related surgical products.
Analysis Results
Intrinsic Value $205.36
Latest Price $117.61
Relative Value 43% undervalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 3.6%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 6.9%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 3.6%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2022 2.12 1.98
2023 2.2 1.92
2024 2.27 1.86
2025 2.36 1.8
2026 2.44 1.75
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 50.4 billion. This corresponds to a present value of 33.7 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 9.31 billion. Adding in the terminal value gives a total present value of 43.0 billion.

There are presently 210.0 million outstanding shares, so the intrinsic value per share is 205.36.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 4,885,000,000
Current Cash 478,500,000
Current Liabilities 3,467,900,000
Current Debt 1,605,100,000
Non-Cash Working Capital (NCWC) 2,543,700,000
Change in NCWC 319,400,000
EBIT 1,058,400,000
Tax Provision 16,300,000
Depreciation and Amortization 1,067,400,000
Capital Expenditure -473,800,000
Unlevered Free Cash Flow 1,930,166,921
Current Assets 5,083,300,000
Current Cash 802,100,000
Current Liabilities 2,556,900,000
Current Debt 500,000,000
Non-Cash Working Capital (NCWC) 2,224,300,000
Change in NCWC 59,800,000
EBIT 748,800,000
Tax Provision -137,000,000
Depreciation and Amortization 1,032,700,000
Capital Expenditure -409,200,000
Unlevered Free Cash Flow 1,432,100,000
Current Assets 4,723,900,000
Current Cash 617,900,000
Current Liabilities 3,441,500,000
Current Debt 1,500,000,000
Non-Cash Working Capital (NCWC) 2,164,500,000
Change in NCWC 176,200,000
EBIT 1,352,200,000
Tax Provision -225,700,000
Depreciation and Amortization 1,006,100,000
Capital Expenditure -207,100,000
Unlevered Free Cash Flow 2,327,400,000
Current Assets 4,427,400,000
Current Cash 542,800,000
Current Liabilities 2,421,300,000
Current Debt 525,000,000
Non-Cash Working Capital (NCWC) 1,988,300,000
Change in NCWC -207,400,000
EBIT 1,294,100,000
Tax Provision 108,200,000
Depreciation and Amortization 1,040,500,000
Capital Expenditure -162,700,000
Unlevered Free Cash Flow 1,964,500,000
Current Assets 4,515,300,000
Current Cash 524,400,000
Current Liabilities 3,020,200,000
Current Debt 1,225,000,000
Non-Cash Working Capital (NCWC) 2,195,700,000
Change in NCWC -27,900,000
EBIT 1,746,000,000
Tax Provision -1,348,800,000
Depreciation and Amortization 1,062,700,000
Capital Expenditure -169,800,000
Unlevered Free Cash Flow 2,611,000,000
Current Assets 4,663,600,000
Current Cash 634,100,000
Current Liabilities 2,381,500,000
Current Debt 575,600,000
Non-Cash Working Capital (NCWC) 2,223,600,000
Change in NCWC -397,500,000
EBIT 1,437,700,000
Tax Provision 95,000,000
Depreciation and Amortization 1,039,300,000
Capital Expenditure -189,200,000
Unlevered Free Cash Flow 1,548,504,454
Current Assets 5,862,900,000
Current Cash 1,623,900,000
Current Liabilities 1,617,900,000
Current Debt 0
Non-Cash Working Capital (NCWC) 2,621,100,000
Change in NCWC 1,065,900,000
EBIT 1,306,800,000
Tax Provision 7,000,000
Depreciation and Amortization 712,400,000
Capital Expenditure -404,200,000
Unlevered Free Cash Flow 2,621,189,817
Current Assets 4,289,000,000
Current Cash 1,695,800,000
Current Liabilities 1,038,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 1,555,200,000
Change in NCWC 196,200,000
EBIT 1,412,700,000
Tax Provision 224,900,000
Depreciation and Amortization 375,800,000
Capital Expenditure -1,697,300,000
Unlevered Free Cash Flow -49,199,459
Current Assets 4,197,700,000
Current Cash 1,807,600,000
Current Liabilities 1,031,600,000
Current Debt 500,000
Non-Cash Working Capital (NCWC) 1,359,000,000
Change in NCWC -27,900,000
EBIT 1,299,300,000
Tax Provision 221,900,000
Depreciation and Amortization 358,500,000
Capital Expenditure -100,000,000
Unlevered Free Cash Flow 1,236,031,209
Current Assets 3,708,700,000
Current Cash 1,555,900,000
Current Liabilities 866,000,000
Current Debt 100,100,000
Non-Cash Working Capital (NCWC) 1,386,900,000
Change in NCWC 57,900,000
EBIT 1,313,800,000
Tax Provision 237,200,000
Depreciation and Amortization 363,100,000
Capital Expenditure -264,500,000
Unlevered Free Cash Flow 1,155,550,621

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