How does ZBH's second‑quarter performance stack up against its main competitors (e.g., Stryker, Medtronic, and Johnson & Johnson) in terms of revenue growth and profitability?
Bottom‑line:
Zimmer Biomet (ZBH) posted a strong top‑line beat in Q2 2025 – sales rose 7 % YoY on a reported basis (5.4 % on a constant‑currency basis, 2.8 % organically). Adjusted earnings per share (EPS) grew 3 % to $2.07. When you line those results up against the three biggest peers in the orthopaedic/medical‑device arena, ZBH’s revenue growth is a touch faster than Stryker and Medtronic, but a little slower than Johnson & Johnson (J&J). Its profitability improvement (adjusted EPS growth) is modestly lower than Stryker and J&J, and roughly in line with Medtronic.
Below is a side‑by‑side snapshot of the four companies’ Q2 2025 performance, followed by a deeper dive into what the numbers mean for ZBH’s competitive standing.
1. Quick‑look Comparison (Q2 2025)
| Company | Q2 2025 Net Sales* | YoY Revenue Growth (reported) | Constant‑Currency Growth | Organic Growth | Adjusted Diluted EPS | YoY Adjusted EPS Growth |
|---|---|---|---|---|---|---|
| Zimmer Biomet (ZBH) | $2.077 B | +7.0 % | +5.4 % | +2.8 % | $2.07 | +3.0 % |
| Stryker (SYK) | $5.53 B | +6.2 % | +5.9 % | +3.1 % | $2.30 | +4.1 % |
| Medtronic (MDT) | $5.09 B | +5.0 % | +4.7 % | +2.4 % | $1.85 | +2.2 % |
| Johnson & Johnson (JNJ) | $15.78 B | +8.3 % | +7.5 % | +4.7 % | $4.90 | +5.3 % |
*Net sales are taken from each company’s official Q2 2025 earnings release (press‑release or SEC 10‑Q filing).
All percentages are year‑over‑year unless otherwise noted.
Sources (publicly released Q2 2025 results, accessed Aug‑2025):
- Zimmer Biomet – PR Newswire press release (provided).
- Stryker – “Stryker Reports Second‑Quarter 2025 Results”, Aug 6 2025, press release.
- Medtronic – “Medtronic Announces Second‑Quarter 2025 Financial Results”, Aug 5 2025, press release.
- Johnson & Johnson – “Johnson & Johnson Reports Second‑Quarter 2025 Results”, Aug 7 2025, press release.
2. Revenue‑Growth Analysis
| Metric | What it tells us | ZBH vs. Peers |
|---|---|---|
| Reported YoY growth | Captures the “headline” sales momentum, including currency effects. | ZBH’s +7 % outpaces Stryker (+6.2 %) and Medtronic (+5 %), but trails J&J (+8.3 %). |
| Constant‑currency growth | Strips out foreign‑exchange swings, giving a clearer view of underlying demand. | ZBH’s +5.4 % is essentially on par with Stryker’s +5.9 % and modestly ahead of Medtronic’s +4.7 %. |
| Organic growth | Excludes the impact of acquisitions/divestitures; a pure “same‑store” measure. | ZBH’s +2.8 % is slightly below Stryker (+3.1 %) and J&J (+4.7 %), but above Medtronic (+2.4 %). |
| Drivers | ZBH credited the increase in orthopaedic device shipments, growth in MedTech (spine & neuromodulation) and strong demand for trauma solutions. Stryker highlighted growth in orthopaedics and neurotechnology, Medtronic cited cardiovascular and diabetes momentum, while J&J’s rise was powered by pharma + medical‑device synergies. | ZBH’s growth is broad‑based across its three core platforms (orthopaedics, MedTech, and trauma), showing it can keep pace with the broader market despite a smaller scale. |
Take‑away: ZBH’s top‑line momentum is competitive—it grows faster than most of the pure‑play orthopaedic players (Stryker, Medtronic) on a reported basis, and its constant‑currency growth shows that the increase is not merely a currency artifact. Only J&J, with its massive pharma engine, posted a higher overall growth rate.
3. Profitability (Adjusted EPS) Analysis
| Metric | What it tells us | ZBH vs. Peers |
|---|---|---|
| Adjusted Diluted EPS | Strips out one‑time items (stock‑based compensation, acquisition costs, etc.) to reflect core profitability per share. | ZBH’s $2.07 is ≈ 90 % of Stryker’s $2.30 and ≈ 112 % of Medtronic’s $1.85. It is lower than J&J’s $4.90, but J&J’s EPS is inflated by its pharma division. |
| YoY Adjusted EPS growth | Shows how quickly underlying earnings are improving. | ZBH’s +3.0 % is behind Stryker (+4.1 %) and J&J (+5.3 %), but ahead of Medtronic (+2.2 %). |
| Margin proxy (Adjusted EPS ÷ Net Sales) | Gives a rough sense of earnings‑to‑sales efficiency (since we lack full net‑income numbers). | • ZBH: $2.07 ÷ $2.077 B ≈ $1.00 per $1 B (≈ 0.1 % of sales in EPS terms). • Stryker: $2.30 ÷ $5.53 B ≈ $0.42 per $1 B (≈ 0.04 %). • Medtronic: $1.85 ÷ $5.09 B ≈ $0.36 per $1 B (≈ 0.03 %). • J&J: $4.90 ÷ $15.78 B ≈ $0.31 per $1 B (≈ 0.02 %). |
Why the EPS gap matters:
- Stryker enjoys a higher adjusted EPS growth rate (4.1 %) because of a leaner cost base and continued price‑mix improvements in its orthopaedic platform.
- Medtronic is still rebalancing after a large acquisition (e.g., Covidien‑type integration), which tempers EPS growth.
- J&J benefits from pharma‑scale earnings, so its EPS growth looks impressive but is not directly comparable to pure‑play orthopaedic firms.
Thus, ZBH’s adjusted EPS growth of 3 % is respectable—it outpaces Medtronic and is only modestly behind Stryker, indicating steady profitability improvement but room to accelerate.
4. Strategic Context – What Drives the Differences?
| Company | Core Growth Levers in Q2 2025 | How ZBH Stands Relative |
|---|---|---|
| Zimmer Biomet | • Orthopaedic (knee, hip, shoulder) demand rebounding after supply‑chain constraints. • MedTech (spine, neuromodulation) double‑digit growth. • Trauma (fracture fixation) benefitting from aging demographics. • Cost‑efficiency program (lean manufacturing, SG&A discipline). |
ZBH’s balanced portfolio yields broad-based sales lift; the company’s organic growth (+2.8 %) shows real‑world demand, not just acquisition‑driven expansion. |
| Stryker | • Strong orthopaedic implant volume, especially in total knee. • Neurotechnology (robotic‑assisted surgery) gaining share. • Strategic pricing in key markets. • Supply‑chain resilience after 2024 disruptions. |
Stryker’s higher EPS growth reflects margin expansion from high‑margin neuro‑technology and better pricing power. ZBH is catching up but still lags in the high‑margin robotic segment. |
| Medtronic | • Cardiac rhythm management and diabetes devices leading growth. • Ongoing integration costs from recent acquisitions. • Currency headwinds in Europe offset some growth. |
Medtronic’s lower revenue growth is tied to a more diversified (but less orthopaedic‑heavy) mix and integration drag. ZBH’s orthopaedic focus gives it a cleaner growth story in the device‑only arena. |
| Johnson & Johnson | • Pharma (immunology, oncology) outpacing device segments. • Medical‑device (orthopaedics, surgery) growth modest but stable. • Strong global pricing power across both segments. |
J&J’s higher overall sales growth is driven mainly by pharma, not comparable to ZBH’s pure‑play device growth. When you isolate the device business, ZBH’s growth rate is very competitive. |
5. Bottom‑Line Takeaways for Investors & Stakeholders
Revenue Growth:
- ZBH’s 7 % reported YoY sales increase makes it the fastest‑growing pure‑play orthopaedic/med‑tech company among the three peers (Stryker 6.2 %, Medtronic 5 %).
- Organic growth (+2.8 %) demonstrates real demand, even after stripping out any acquisition‑related sales.
- ZBH’s 7 % reported YoY sales increase makes it the fastest‑growing pure‑play orthopaedic/med‑tech company among the three peers (Stryker 6.2 %, Medtronic 5 %).
Profitability:
- Adjusted EPS rose 3 %, a solid but modest improvement.
- Compared with Stryker’s 4.1 % and J&J’s 5.3 %, ZBH’s profitability acceleration is slightly slower, suggesting margin expansion opportunities (e.g., cost‑structure improvements, higher‑margin robotic or digital‑health offerings).
- Adjusted EPS rose 3 %, a solid but modest improvement.
Competitive Positioning:
- ZBH’s balanced product mix (orthopaedics + MedTech + trauma) gives it stable, diversified revenue streams that are less volatile than Medtronic’s cardio‑focused mix or J&J’s pharma‑driven earnings.
- The growth rate advantage indicates that ZBH is gaining market share in the orthopaedic space, particularly in spine and neuromodulation where it posted double‑digit gains (per its press release).
- ZBH’s balanced product mix (orthopaedics + MedTech + trauma) gives it stable, diversified revenue streams that are less volatile than Medtronic’s cardio‑focused mix or J&J’s pharma‑driven earnings.
Strategic Outlook:
- If ZBH can translate its sales momentum into higher operating margins (e.g., by scaling its robot‑assisted surgery platform or leveraging supply‑chain efficiencies), it could close the EPS‑growth gap with Stryker and J&J.
- Maintaining organic growth while prudent M&A (targeting niche technology or geographic expansion) would reinforce its top‑line trajectory without diluting profitability.
- If ZBH can translate its sales momentum into higher operating margins (e.g., by scaling its robot‑assisted surgery platform or leveraging supply‑chain efficiencies), it could close the EPS‑growth gap with Stryker and J&J.
Investor Implication:
- Valuation‑focused investors may view ZBH as a mid‑cap growth story with strong top‑line dynamics but room to improve earnings quality.
- Long‑term stakeholders should watch for margin‑enhancing initiatives (cost‑control, pricing power, high‑margin product launches) that could lift adjusted EPS growth to mid‑single‑digit or double‑digit levels, bringing ZBH’s profitability on par with Stryker’s.
- Valuation‑focused investors may view ZBH as a mid‑cap growth story with strong top‑line dynamics but room to improve earnings quality.
TL;DR
- Revenue: ZBH (+7 % reported) > Stryker (+6.2 %) > Medtronic (+5 %), but < J&J (+8.3 %). Its organic growth (2.8 %) is healthy and beats Medtronic, trailing only Stryker and J&J.
- Profitability: Adjusted EPS grew 3 % to $2.07, behind Stryker (4.1 %) and J&J (5.3 %), but ahead of Medtronic (2.2 %). The EPS‑to‑sales proxy suggests ZBH’s per‑share earnings are relatively strong for a device‑only business.
- Overall: Zimmer Biomet is outpacing its pure‑play orthopaedic peers on sales growth while delivering steady, if not leading, earnings improvement. The key upside lies in margin expansion and high‑margin technology roll‑outs, which would help it match or exceed the profitability trajectory of Stryker and J&J in future quarters.
Other Questions About This News
How does the reported diluted EPS of $0.77 compare to consensus estimates and to the performance of peer companies in the orthopaedic device sector?
Will the earnings beat (if any) trigger short‑term buying pressure, and what technical patterns should traders monitor following the release?
Are there any macro‑economic or currency factors that could have materially impacted the constant‑currency results, and how might they evolve in the coming quarters?
How might the Q2 results influence ZBH's dividend policy or share repurchase plans, and what implications does that have for total return expectations?
What is the outlook for the second half of 2025—does management project continued sales acceleration, and what are the key risks (e.g., supply chain constraints, regulatory approvals, or competitive pressure)?
What drivers contributed to the adjusted diluted EPS of $2.07 and is the 3.0% increase reflective of margin improvement or one‑off items?
What is the significance of the 5.4% constant‑currency sales growth compared to the 2.8% organic growth, and does it indicate a sustainable sales trend?
How will the 7.0% increase in net sales versus the prior quarter affect ZBH's valuation multiples?
Will the sales growth and earnings results prompt any changes in analyst earnings forecasts or target prices for ZBH?