Munger Mode rating: 2 out of 5 — Sell. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
We have watched the orthopedic implant business for decades, and we will say up front what we conclude at the end: Zimmer Biomet is an average business wearing the costume of a wonderful one. It sells products with genuinely sticky customer relationships in an oligopoly with favorable demographics — and yet it has spent ten years losing share in its crown-jewel knee franchise, destroying capital through acquisition, restructuring itself annually, and churning through executives. The stock is statistically cheap at roughly 11.5 times this year's expected adjusted earnings, and that cheapness will tempt many. It does not tempt us. Our first rule is that time is the friend of the wonderful business and the enemy of the mediocre. Zimmer Biomet's own decade-long record tells you which kind it is. This is a business a fifth-grader can understand, which we like.
Recent filings analysed: 8-K (2026-08-05), 8-K (2026-08-05), 10-Q (2026-08-05), 8-K (2026-06-29).
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