Home > Comparison > Healthcare > ZBH vs ALGN
The strategic rivalry between Zimmer Biomet Holdings, Inc. and Align Technology, Inc. defines the current trajectory of the healthcare medical devices sector. Zimmer Biomet operates as a capital-intensive orthopaedic products manufacturer with a broad global footprint. In contrast, Align Technology focuses on high-margin orthodontic devices and digital scanning services. This analysis will determine which company’s strategic model offers superior risk-adjusted returns for a diversified portfolio in today’s evolving healthcare landscape.
Table of contents
Companies Overview
Zimmer Biomet and Align Technology stand as pivotal players in the medical devices industry, shaping musculoskeletal and dental health markets respectively.
Zimmer Biomet Holdings, Inc.: Orthopedic Innovation Leader
Zimmer Biomet dominates the musculoskeletal healthcare sector through its design and manufacturing of orthopaedic reconstructive products. Its core revenue derives from knee, hip, spine, and trauma devices, along with dental implants and surgical instruments. In 2026, the company focuses strategically on expanding its global footprint across the Americas, Europe, and Asia Pacific to reinforce its market position.
Align Technology, Inc.: Clear Aligner Pioneer
Align Technology leads in digital orthodontics with its Invisalign clear aligners and iTero intraoral scanners. Its revenue stems from comprehensive and non-comprehensive orthodontic solutions and advanced scanning technologies. In 2026, Align emphasizes innovation in scanner software and digital services, strengthening its foothold in both orthodontics and restorative dentistry markets.
Strategic Collision: Similarities & Divergences
Zimmer Biomet and Align target adjacent medical device markets but diverge in approach: Zimmer Biomet relies on a broad portfolio of physical implants, while Align invests heavily in digital orthodontic technologies. They compete most directly in dental reconstructive innovation. Their investment profiles contrast; Zimmer Biomet offers stable orthopedic exposure, whereas Align presents growth potential through disruptive digital solutions.
Income Statement Comparison
This data dissects the core profitability and scalability of both corporate engines to reveal who dominates the bottom line:
| Metric | Zimmer Biomet Holdings, Inc. (ZBH) | Align Technology, Inc. (ALGN) |
|---|---|---|
| Revenue | 7.68B | 4.04B |
| Cost of Revenue | 2.19B | 1.20B |
| Operating Expenses | 4.20B | 2.19B |
| Gross Profit | 5.49B | 2.80B |
| EBITDA | 2.25B | 817M |
| EBIT | 1.25B | 672M |
| Interest Expense | 218M | 0 |
| Net Income | 904M | 421M |
| EPS | 4.45 | 5.63 |
| Fiscal Year | 2024 | 2024 |
Income Statement Analysis: The Bottom-Line Duel
This income statement comparison reveals which company runs a more efficient and profitable corporate engine in recent years.
Zimmer Biomet Holdings, Inc. Analysis
Zimmer Biomet shows solid revenue growth, from $6.1B in 2020 to $7.7B in 2024, with net income surging from a loss to $904M. Gross margin remains strong at 71.5%, and net margin holds at a healthy 11.8%. However, recent EBIT and net income growth show signs of slowing momentum, suggesting margin pressures despite overall expansion.
Align Technology, Inc. Analysis
Align Technology’s revenue hovers around $4B from 2021 to 2025, but net income declines significantly, from $772M in 2021 to $410M in 2025. Gross margin stays favorable at 67.2%, yet EBIT margin drops to zero in 2025, signaling operational challenges. The company faces shrinking profitability and negative growth trends over the period, despite stable top-line figures.
Sustained Margin Strength vs. Profitability Erosion
Zimmer Biomet demonstrates superior margin health and robust net income growth, outperforming Align’s stagnant revenue and declining profitability. Zimmer’s efficient cost management and expanding bottom line make it the fundamental winner. Investors seeking resilient profit profiles may prefer Zimmer’s consistent margin power over Align’s shrinking returns.
Financial Ratios Comparison
These vital ratios act as a diagnostic tool to expose the underlying fiscal health, valuation premiums, and capital efficiency of the companies compared below:
| Ratios | Zimmer Biomet Holdings, Inc. (ZBH) | Align Technology, Inc. (ALGN) |
|---|---|---|
| ROE | 7.25% | 10.94% |
| ROIC | 5.68% | 9.99% |
| P/E | 23.74 | 37.05 |
| P/B | 1.72 | 4.05 |
| Current Ratio | 1.91 | 1.22 |
| Quick Ratio | 0.99 | 1.10 |
| D/E | 0.50 | 0.03 |
| Debt-to-Assets | 29.0% | 1.92% |
| Interest Coverage | 5.90 | 0 (no debt) |
| Asset Turnover | 0.36 | 0.64 |
| Fixed Asset Turnover | 3.75 | 2.89 |
| Payout Ratio | 21.69% | 0% |
| Dividend Yield | 0.91% | 0% |
| Fiscal Year | 2024 | 2024 |
Efficiency & Valuation Duel: The Vital Signs
Financial ratios act as a company’s DNA, exposing hidden risks and revealing operational strengths that drive shareholder value.
Zimmer Biomet Holdings, Inc.
Zimmer Biomet shows moderate profitability with a 7.25% ROE and an 11.77% net margin, reflecting steady but unspectacular returns. Its valuation appears fair, with a neutral P/E of 23.74 and P/B of 1.72, suggesting the stock is reasonably priced. The company returns modest dividends (0.91% yield) but focuses on maintaining a solid balance sheet and moderate leverage.
Align Technology, Inc.
Align Technology delivers higher profitability, with a 10.94% ROE and a 10.54% net margin, indicating efficient capital use. However, its valuation is stretched, reflected by a high P/E of 37.05 and P/B of 4.05, signaling premium pricing. Align does not pay dividends, opting instead to reinvest heavily in R&D and growth initiatives to fuel future expansion.
Balanced Profitability vs. Premium Growth
Zimmer Biomet offers a more balanced valuation with stable profitability and moderate shareholder returns, while Align Technology commands a premium for its superior efficiency and growth reinvestment. Investors seeking value and income may prefer Zimmer, whereas growth-oriented investors might lean toward Align’s high operational returns despite its stretched valuation.
Which one offers the Superior Shareholder Reward?
Zimmer Biomet (ZBH) pays a modest dividend yield near 0.9% with a sustainable payout ratio around 22%. It balances dividends with steady buybacks supported by strong free cash flow (5.6/share). Align Technology (ALGN) pays no dividend but aggressively reinvests in growth and innovation, fueling higher free cash flow (8.3/share) and share repurchases. I observe ZBH’s income-focused model suits income investors valuing steady cash returns. ALGN’s strategy favors capital appreciation through reinvestment and buybacks, appealing to growth-oriented investors. Given ALGN’s higher free cash flow, low leverage, and robust buyback coverage, I find its total return potential superior in 2026 despite zero dividends.
Comparative Score Analysis: The Strategic Profile
The radar chart reveals the fundamental DNA and trade-offs of Zimmer Biomet and Align Technology, highlighting their operational strengths and financial positioning:
Zimmer Biomet excels in discounted cash flow (DCF) with a top score of 5, indicating strong intrinsic value. Align Technology shows superior balance with consistent scores in ROA (4) and debt-to-equity (4), signaling efficient asset use and financial stability. Zimmer’s low debt-to-equity score (1) is a red flag, reflecting higher leverage risk. Align offers a more balanced profile, while Zimmer relies heavily on its cash flow advantage.
Bankruptcy Risk: Solvency Showdown
Align Technology’s Altman Z-Score of 4.56 places it securely in the safe zone, indicating strong solvency and low bankruptcy risk. Zimmer Biomet’s 2.34 score sits in the grey zone, suggesting moderate financial distress risk in this economic cycle:
Financial Health: Quality of Operations
Zimmer Biomet scores an impressive 8 on the Piotroski F-Score, signaling very strong financial health with robust profitability and operational efficiency. Align Technology’s 7 is also strong but slightly trails Zimmer, indicating minor internal metric weaknesses:
How are the two companies positioned?
This section dissects the operational DNA of Zimmer Biomet (ZBH) and Align Technology (ALGN) by comparing their revenue distribution and internal dynamics. The goal is to confront their economic moats to identify which model delivers the most resilient, sustainable competitive advantage today.
Revenue Segmentation: The Strategic Mix
This visual comparison dissects how Zimmer Biomet Holdings, Inc. and Align Technology, Inc. diversify their income streams and where their primary sector bets lie:
Zimmer Biomet anchors revenue in Knees at $3.17B and Hips at $2B, with meaningful contributions from S E T ($1.87B) and Other Product Category ($640M). Align pivots heavily on Clear Aligner at $3.23B, dwarfing Scanners And Services at $769M. Zimmer’s diversified portfolio reduces concentration risk, while Align’s reliance on clear aligners signals ecosystem lock-in but exposes it to market shifts in orthodontics.
Strengths and Weaknesses Comparison
This table compares the strengths and weaknesses of Zimmer Biomet and Align Technology:
Zimmer Biomet Strengths
- Diverse product portfolio with hips, knees, S E T, and other categories
- Strong global presence across Americas, Asia Pacific, and EMEA
- Favorable net margin at 11.77%
- Solid current ratio at 1.91 indicating liquidity
- Low debt-to-assets ratio at 29.04%
- Favorable interest coverage at 5.76
Align Technology Strengths
- Leading clear aligner product with 3.23B revenue
- Favorable quick ratio at 1.1 showing good liquidity
- Very low debt-to-assets at 1.92%
- Neutral ROIC near 9.99%
- Global sales diversified with US, Switzerland, and international markets
Zimmer Biomet Weaknesses
- Unfavorable ROE at 7.25% below sector norms
- Asset turnover low at 0.36 indicating less efficient asset use
- Dividend yield low at 0.91%
- PE ratio neutral but modest at 23.74
- Quick ratio neutral at 0.99
- Moderate leverage with debt-to-assets near 29%
Align Technology Weaknesses
- Unfavorable PE at 37.05 and PB at 4.05 indicate high valuation
- Interest coverage of 0 signals risk in servicing debt
- No dividend yield reported
- Current ratio moderate at 1.22
- Asset turnover neutral at 0.64
- WACC unavailable, limiting cost of capital assessment
Overall, Zimmer Biomet shows strength in diversification and conservative financial management but reveals operational efficiency weaknesses. Align Technology excels in product focus and liquidity but faces valuation and debt servicing concerns. These contrasts highlight different strategic positions and financial profiles in the medical technology sector.
The Moat Duel: Analyzing Competitive Defensibility
A structural moat is the sole shield protecting long-term profits from relentless competition and market entry pressures:
Zimmer Biomet Holdings, Inc.: Diversified Product and Geographic Moat
Zimmer Biomet’s moat relies on broad product portfolios across orthopedics and global reach, reflected in stable gross margins near 71%. Its rising ROIC trend hints at improving capital efficiency in 2026, though currently slightly below WACC. Expansion in Asia Pacific and EMEA could deepen its moat.
Align Technology, Inc.: Innovation-Driven Network Effects
Align’s competitive edge stems from its Invisalign system and digital scanner ecosystem, creating high switching costs unlike Zimmer’s diversified hardware. However, its declining ROIC and unfavorable recent margin trends expose vulnerability. Growth hinges on new scanner software and market penetration outside the US.
Moat Battle: Diversification vs. Innovation Network
Zimmer Biomet exhibits a wider moat with consistent profitability and geographic diversification, despite a slight value destruction warning. Align’s innovation moat is narrower and currently under pressure from deteriorating returns. Zimmer is better positioned to defend market share amid shifting healthcare demands.
Which stock offers better returns?
Over the past year, both Zimmer Biomet and Align Technology exhibited marked price declines with distinct trading dynamics and recent shifts in momentum.
Trend Comparison
Zimmer Biomet’s stock price dropped 29.62% over the past 12 months, showing a bearish trend with decelerating losses and a standard deviation of 10.04. The price ranged from 131.98 to 86.6.
Align Technology’s stock fell 48.69% over the same period, reflecting a bearish trend but with accelerating losses and a much higher volatility at 50.54. Prices fluctuated between 327.92 and 125.79.
Despite Align’s steeper overall decline, its recent 13.15% gain contrasts with Zimmer’s recent 4.44% loss, giving Align the stronger market performance in the latest period.
Target Prices
Analysts present a bullish consensus for Zimmer Biomet Holdings and Align Technology based on their target price ranges.
| Company | Target Low | Target High | Consensus |
|---|---|---|---|
| Zimmer Biomet Holdings, Inc. | 86 | 130 | 108 |
| Align Technology, Inc. | 140 | 200 | 176.43 |
Zimmer Biomet trades near the low end of its target range, suggesting upside potential. Align Technology’s consensus target sits well above its current price, indicating strong growth expectations.
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How do institutions grade them?
Here are the recent institutional grades for Zimmer Biomet Holdings, Inc. and Align Technology, Inc.:
Zimmer Biomet Holdings, Inc. Grades
This table shows the latest grades from major financial institutions for Zimmer Biomet Holdings, Inc.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| UBS | maintain | Sell | 2026-01-28 |
| Bernstein | maintain | Market Perform | 2026-01-09 |
| BTIG | maintain | Buy | 2026-01-08 |
| Evercore ISI Group | upgrade | Outperform | 2026-01-05 |
| Baird | downgrade | Neutral | 2025-12-16 |
| Citigroup | maintain | Neutral | 2025-12-11 |
| Canaccord Genuity | maintain | Hold | 2025-11-10 |
| Barclays | maintain | Underweight | 2025-11-06 |
| RBC Capital | maintain | Outperform | 2025-11-06 |
| JP Morgan | downgrade | Neutral | 2025-11-06 |
Align Technology, Inc. Grades
This table details recent institutional grades for Align Technology, Inc.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Mizuho | maintain | Outperform | 2026-01-20 |
| Piper Sandler | maintain | Overweight | 2025-10-30 |
| Morgan Stanley | maintain | Equal Weight | 2025-10-30 |
| Wells Fargo | maintain | Overweight | 2025-10-30 |
| Evercore ISI Group | maintain | Outperform | 2025-10-30 |
| Morgan Stanley | maintain | Equal Weight | 2025-10-21 |
| UBS | maintain | Neutral | 2025-10-16 |
| Mizuho | maintain | Outperform | 2025-10-13 |
| Jefferies | downgrade | Hold | 2025-10-10 |
| Evercore ISI Group | maintain | Outperform | 2025-10-08 |
Which company has the best grades?
Align Technology consistently receives higher grades, including multiple Outperform and Overweight ratings, signaling stronger institutional confidence. Zimmer Biomet shows mixed ratings, including Sell and Neutral grades, indicating more cautious sentiment. Investors may interpret Align’s superior grades as a sign of better growth or risk-adjusted potential.
Risks specific to each company
The following categories identify critical pressure points and systemic threats facing Zimmer Biomet Holdings, Inc. and Align Technology, Inc. in the 2026 market environment:
1. Market & Competition
Zimmer Biomet Holdings, Inc.
- Established in orthopedic devices with broad product portfolio, faces mature market challenges and pricing pressure.
Align Technology, Inc.
- Innovator in clear aligners with rapid growth but intense competition and higher market volatility.
2. Capital Structure & Debt
Zimmer Biomet Holdings, Inc.
- Moderate leverage (D/E 0.5) with strong interest coverage (5.76), indicating solid debt management.
Align Technology, Inc.
- Minimal debt (D/E 0.03) but zero interest coverage raises questions on earnings sufficiency for obligations.
3. Stock Volatility
Zimmer Biomet Holdings, Inc.
- Low beta at 0.61 implies stable stock with lower sensitivity to market swings.
Align Technology, Inc.
- High beta of 1.83 signals significant stock price volatility and investor risk.
4. Regulatory & Legal
Zimmer Biomet Holdings, Inc.
- Regulatory scrutiny typical for orthopedic implants; risks from product recalls or compliance shifts.
Align Technology, Inc.
- Faces emerging regulatory risks tied to digital health technologies and data privacy.
5. Supply Chain & Operations
Zimmer Biomet Holdings, Inc.
- Global manufacturing footprint aids resilience but exposes to geopolitical supply disruptions.
Align Technology, Inc.
- Dependence on tech hardware and software supply chains increases vulnerability to component shortages.
6. ESG & Climate Transition
Zimmer Biomet Holdings, Inc.
- Moderate ESG focus; pressure to reduce carbon footprint in manufacturing.
Align Technology, Inc.
- Growing emphasis on sustainability in tech-driven healthcare products and operations.
7. Geopolitical Exposure
Zimmer Biomet Holdings, Inc.
- Broad international presence subjects it to currency and trade policy risks.
Align Technology, Inc.
- Substantial international sales, especially in China, increasing geopolitical risk exposure.
Which company shows a better risk-adjusted profile?
Zimmer Biomet contends with moderate leverage and lower stock volatility, suggesting a steadier risk profile. Align Technology’s higher beta and thin debt cushion increase financial and market risks. Zimmer’s stable interest coverage and balance sheet metrics provide stronger downside protection. Recent data shows Align’s zero interest coverage and high valuation multiples as red flags. Zimmer’s Altman Z-score in the grey zone versus Align’s safe zone confirms solvency risk nuances but favors Zimmer’s conservative capital structure. Overall, Zimmer Biomet presents a superior risk-adjusted profile given its balance of financial stability and market steadiness.
Final Verdict: Which stock to choose?
Zimmer Biomet (ZBH) stands out as a resilient cash generator with improving profitability amid value erosion. Its strength lies in operational efficiency and solid balance sheet metrics, though the persistent value destruction signals a point of vigilance. It suits portfolios targeting steady income with moderate risk tolerance.
Align Technology (ALGN) commands a strategic moat through innovative dental technologies and recurring revenue streams. Its cleaner balance sheet and strong free cash flow profile offer better financial stability than ZBH. ALGN fits well in growth-oriented portfolios seeking market leadership with a degree of valuation caution.
If you prioritize consistent cash flow and improving margins, Zimmer Biomet is the compelling choice due to operational discipline and solid fundamentals despite its value challenges. However, if you seek growth backed by innovation and stronger balance sheet safety, Align Technology offers superior strategic positioning and financial stability, albeit at a premium.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Zimmer Biomet Holdings, Inc. and Align Technology, Inc. to enhance your investment decisions:
