Zimmer Biomet

Phase A — Understand the business

Company Overview

Zimmer Biomet designs, makes and sells musculoskeletal medical devices: orthopedic reconstructive implants (knees, hips), sports medicine / biologics / extremities / trauma ("S.E.T."), craniomaxillofacial & thoracic (CMFT), bone cement, surgical products, and an integrated digital/robotic suite (ROSA robot + ZBEdge data platform). History traces to Zimmer Manufacturing (1927, Warsaw, Indiana); spun off from its parent in 2001; transformative 2015 merger with Biomet created today's "Zimmer Biomet".

How it makes money. It sells implants and instruments to orthopedic/neuro surgeons and the hospitals/ASCs (ambulatory surgery centers) they operate in, through two channels: (1) direct to institutions, and (2) via stocking distributors/dealers. The defining commercial fact: ~85% of net sales are consignment — ZBH retains title to inventory parked at the point of care so the right size/component is on hand for an elective procedure. This is working-capital-heavy (inventories $2.29B at YE2025) and the reason the business throws off less free cash per dollar of sales than software-like medtech.

Customer concentration: structurally low. "No individual customer accounted for more than 2 percent of our net sales for 2025". Demand is procedure-driven and seasonal (elective surgery dips in summer, rises at year-end once insurance deductibles are met).

Scale (FY2025). Net sales $8,231.5M (+7.2% YoY); ~17,000 employees (≈7,000 US / ≈10,000 ex-US), ~2,000 in R&D, ~6,000 in manufacturing; CEO Ivan Tornos (since Aug 2023, Chairman since May 2025). Three reportable segments are geographic: Americas, EMEA, Asia Pacific (the product-category view below is supplemental).

The current strategic story is two-pronged and in tension: (a) a multi-year initiative to convert the US sales force from independent agents to employees — a deliberate channel disruption management says is dampening near-term US growth; (b) M&A-led portfolio diversification away from core recon into higher-growth adjacencies (Paragon 28 foot & ankle, Monogram robotics).

Supply Chain

Upstream → ZBH → end customer, named:

• Raw materials (upstream inputs): cobalt chrome, titanium, tantalum, polymer, sterile packaging — bought 100% from external suppliers; ZBH signs 12–24-month supply contracts to dampen commodity-price swings. Some inputs are single-sourced "for reasons of quality assurance, sole source availability, cost effectiveness or constraints resulting from regulatory requirements" — a named chokepoint, though not quantified.
• Manufacturing (the company): in-house plants plus strategic outsourcing of components to qualified suppliers; Lean/Six Sigma; primary R&D/manufacturing nodes in Warsaw IN, Montreal, Denver, Jacksonville, Austin, Zug (Switzerland), Beijing.
• Distribution: large centralized warehouses (US + Europe) plus market-specific facilities; ~85% consignment, expedited courier shipping; "we generally do not have firm orders" — replenishment is procedure-triggered.
• End customers (downstream): orthopedic/neuro surgeons, hospitals, ASCs, group purchasing organizations (GPOs, ~3-year contracts), and in Asia/Europe a dealer network acting as order agents for hospitals. In Europe healthcare is largely government-funded → ZBH is indirectly exposed to public-hospital budgets and price-containment.

Chokepoints: (1) single-source raw materials; (2) tariff exposure — US tariffs were a named 2025 margin drag (≈0.4pp of gross margin) with a ~$30M probable refund booked in Q1 2026; (3) regulatory bottleneck — EU MDR re-certification deadlines (Dec 2027/2028) and the UK's emerging UK MDR are an ongoing compliance load.

Competitive Advantages (moats)

The moat is real but narrow, and it is in recon — not robotics.

• Scale + #1 share in the core: In knees, ZBH leads at ~33% share (Stryker ~29%, Smith & Nephew ~11%); in hips ZBH ~25% (Stryker ~24%, S&N ~9%). Leadership in the two highest-value recon categories is the durable asset.
• Switching costs / surgeon lock-in: Surgeons train on specific implant systems and instrumentation; ZBH "invests a significant amount of time and expense in training sales associates" and surgeons. The consignment model embeds ZBH physically in the OR. This is a genuine switching-cost moat at the surgeon level — but it cuts both ways (rivals' robots can flip surgeons over a hardware cycle).
• IP: >6,000 issued patents and applications worldwide.
• Brand/portfolio breadth: Persona/NexGen/Oxford knees; Taperloc/Avenir/G7 hips; the full musculoskeletal bag lets ZBH contract across GPOs.

Bargaining power — weakening on both sides. Over suppliers: moderate (single-source dependencies cap it). Over customers: eroding — "the majority of countries... continue to experience pricing pressure from local hospitals, health systems, and governmental healthcare cost containment"; global selling prices had only a minimal (≈0%) effect on 2025 growth, and ZBH guides to price declines in 2026. A leader that cannot raise price is a leader whose moat protects share, not economics.

The moat gap that defines the bear case: ZBH leads recon but trails badly in surgical robotics, the channel through which the next decade of implant share will be won. Stryker's Mako had >2,000 systems installed at YE2024 (first-mover via the 2013 MAKO acquisition); J&J's VELYS ~500 installs; ZBH's ROSA is the #2/#3 chaser. Robots drive higher-margin implant pull-through — whoever owns the installed base compounds share. ZBH is defending a recon lead with a weaker robot, and bought Monogram (Oct 2025) precisely to close that gap.

Segments

Reportable (geographic) segments — net sales & segment operating profit:

Every geography grew sales but every geography lost margin in 2025 — the common cause management cites: higher manufacturing costs + Paragon 28 dilutionDilutionIssuing new shares, so each existing share owns a smaller slice of the same company. (Paragon runs at a lower operating margin than legacy ZBH). That is the single most important segment fact: the M&A used to buy growth is structurally margin-dilutive.

Supplemental product-category view (FY2025):

Geography (alt view): US $4,764.0M (+7.3%) / International $3,467.5M (+7.0%); total $8,231.5M.

The trend that matters: strip out the Paragon 28 acquisition (which contributed +2.5pp of the +7.2% total) and FX (+0.8pp), and underlying organic growth is low-single-digit (~4% reported but materially lower on a clean organic constant-currency basis — Q1 2026 organic CC was just +2.9%). Knees and hips — the core — grow ~mid-single-digits in line with the market, no faster. ZBH is a share-holder, not a share-gainer, in its own franchise.

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Phase B — Measure performance

Earnings Result

FY2025 consolidated statement of earnings:

FY2025 is a down year on GAAP — net earnings fell 22% ($903.8M → $705.1M) and operating margin compressed 340bps. Management's bridge:

• ~$170M inventory & instrument charge for product lines being discontinued by 2032 (−1.9pp gross margin from inventory charges; −0.4pp inventory step-up; −0.4pp tariffs);
• Paragon 28 + Monogram deal costs incl. $55.1M accelerated-vesting comp and higher interest on acquisition debt;
• US tariffs, higher performance comp, direct-to-patient marketing / med-ed / IT investment;
• partially offset by sales growth, favorable mix, $77.1M of net contingent-consideration gains, gains on equity investments, lower restructuring/litigation.

The GAAP vs. adjusted gap is the whole game. GAAP diluted EPS was $3.55, but adjusted (non-GAAP) EPS was ~$8/share in 2024 and 2025, and management guides 2026 adjusted EPS to $8.40–$8.55. The ~$4.85 wedge is dominated by intangible amortization ($665.9M, ≈$3.35/sh pretax) plus one-time charges — i.e. the accounting drag of two decades of debt-funded M&A. Whether you anchor on $3.55 (GAAP) or ~$8.50 (adjusted) determines whether ZBH looks expensive (~25x) or cheap (~10–12x).

Latest print — Q1 2026 (filed 2026-05-01):

• Net sales $2,086.7M, +9.3% reported (US +8.6%, Intl +10.3%) — but organic constant-currency only +2.9%; Paragon contributed +3.9pp, FX +2.5pp;
• GAAP diluted EPS $1.22 (vs $0.91 PY); adjusted diluted EPS $2.09, +15.5%;
• Operating profit $373.2M (vs $292.3M); net earnings $238.1M (vs $182.0M); helped by ~$30M probable tariff-refund adjustment, lower restructuring, lower R&D spend;
• ETR 20.9%; operating cash flow $359.4M (down slightly on bonus timing); debt $7,471.0M; cash $424.2M.
• Result vs. consensus: beat (adj EPS $2.09 vs ~$2.09 est; GAAP $1.22 vs ~$1.01 est; revenue $2.087B vs ~$2.070B est) — and the stock dropped anyway. That reaction is the tell (see Lens 8).
• 2026 guidance — raised on EPS, held on growth: organic CC revenue +1–3% (reported +2.5–4.5%); adjusted EPS raised to $8.40–$8.55 (from $8.30–$8.45); free-cash-flow growth +9–11%.

Balance-sheet flags (YE2025):

• Total assets $23,091.7M, of which goodwill $9,947.1M + intangibles $4,717.3M = $14.66B ≈ 63% of assets — the M&A footprint dominates the balance sheet (impairment risk live, see Lens 10);
• Inventories $2,286.4M (up; consignment-heavy);
• Receivables $1,704.4M (up 15% YoY on +7% sales — watch, partly Paragon);
• Total debt $7,519.1M; cash $591.9M → net debt ≈ $6.93B; equity $12,705.8M.

Earnings Calls (sentiment trend)

No transcripts on the research shelf (transcripts/ empty) — sentiment reconstructed from filing tone + web call coverage, labeled accordingly.

• Management focus (consistent across recent calls): (1) "transformation" — the US agent-to-employee sales conversion; (2) robotics/ROSA placements as the growth flywheel; (3) M&A integration (Paragon foot & ankle, Monogram robotics); (4) margin/restructuring discipline; (5) reaffirming the ~$8.40+ adjusted-EPS algorithm.
• Tone shift over time — defensive, and increasingly so. The 2024 calls were dominated by the SAP/ERP disruption (a software cutover that hit H2-2024 shipments, ~$50M impact, esp. in S.E.T.). Through 2025–Q1 2026 the narrative pivoted to "ERP is behind us, growth is reaccelerating" — but the recurring analyst frustration is organic growth that never quite shows up: an oft-cited "~eight straight quarters of soft/declining organic revenue".
• The phrase they keep using: "opportunistic end-of-quarter/end-of-year customer purchases" and "timing of ROSA and bone cement sales" — i.e. management itself flags that recent beats lean on pull-forward and timing, not clean demand. That hedging is the single most important sentiment signal in the filings.
• What they stopped saying: the bullish ">5% organic" framing of prior years; guidance is now anchored at +1–3% organic CC — a quiet structural downgrade of the growth algorithm.

Comps

Peer set: the orthopedics oligopoly. Multiples are `` with source/date or n/a. Do not over-anchor — several cells are single-source and as-of-different-dates.

The one comp number that matters: ZBH trades at roughly 12x forward adjusted earnings versus Stryker's ~32x. That is a ~60% relative discount for the recon market leader. The market is pricing ZBH as a structurally-impaired, ex-growth compounder and SYK as a secular robotics winner. The entire ZBH long thesis is that this gap is too wide; the entire bear thesis is that it is deserved.

ZBH's own EV/EBITDA ~11x is below the medtech-large-cap average — not a screaming-cheap distressed multiple, but a clear "show-me" discount.

Stock-Price Catalysts

Pattern over the last ~5 years (mostly ``):

• 2024 — SAP/ERP disruption cut H2 shipments (~$50M, concentrated in S.E.T.); multiple target cuts (Oppenheimer to $135, others to $126). This is the proximate cause of the stock's de-rating from its prior ~$135–$145 target zone to today's ~$88.
• Jan 2025 — Paragon 28 deal announced (~$1.2B EV) — entry into the ~$5B foot & ankle market (growing 7–8%); initially received as a sensible tuck-in.
• 2025–2026 — repeated "beat-and-drop": ZBH has beaten EPS/revenue consensus (Q4-2024, Q1-2026) and the stock has fallen anyway, because the beats are driven by adjusted-EPS and M&A/FX/timing while organic growth keeps disappointing. The market has clearly decided this name reacts to organic growth, not headline EPS.
• Downgrades as catalysts: Raymond James → Market Perform (from Outperform) and BTIG → Neutral, both citing inconsistent organic growth and an underwhelming Paragon contribution.
• Oct 2025 — Monogram robotics acquisition ($377.5M incl. contingent consideration) — a robotics catch-up bet.

What the tape reveals: ZBH is a "prove-the-organic-growth" stock. Adjusted-EPS beats are discounted as financial engineering; the share price keys off (a) clean organic constant-currency growth and (b) any sign ROSA is winning the robotics installed-base race. Macro/rate moves matter less than for high-multiple peers because the multiple is already low.

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Phase C — Judge people & books

Management

• CEO Ivan Tornos — appointed President & CEO Aug 2023, Chairman May 2025. Career operator: COO of ZBH (2021–23), prior senior roles at BD/Bard, Covidien, Baxter, and 11 years at Johnson & Johnson. Archetype: professional manager / turnaround operator, not founder. Track record at ZBH so far: he inherited a sub-scale-growth franchise, navigated the 2024 ERP fire, and pivoted to an M&A-led diversification + sales-force-transformation strategy. The verdict on that strategy is still open and trending skeptical — organic growth has not inflected on his watch.
• CFO Suketu Upadhyay (also EVP Finance, Operations & Supply Chain); CSO/BD Jehanzeb Noor (ex-Smiths Medical CEO, MIT-trained) leads M&A — a recently rebuilt, deal-oriented top team.
• Tenure & skin in the game — thin. Tornos directly owned ~59K shares + ~65K RSUs (Feb 2026), rising to ~83K shares after March 2026 vesting. At ~$88 that's ~$7M of direct stock — modest insider ownership for a ~$17B-cap CEO; "insider activity appears modest... no large purchases or exits". No founder-level alignment.
• Capital-allocation history — the central debate. ZBH is an inveterate acquirer (Biomet 2015; Paragon 28 + Monogram 2025) funding deals with debt (FY2025: issued $2.49B senior notes; net debt $6.9B). It also returns cash: $0.24/qtr dividend ($0.96/yr), $487.0M buyback in 2025, $250.1M in Q1 2026, and a fresh $1.5B buyback authorized Feb 2026. The scorecard is poor where it counts: TTM ROIC ~5.0%, below its cost of capital — "the company earns returns that do not match up to its cost of capital". ROE ≈ 5.6% in 2025. Buying lower-margin assets (Paragon) with debt while the core can't accelerate is value-neutral-to-destructive on these returns.
• Red flags: (1) the legacy FCPA record (see Lens 10) — a governance scar, now legally closed; (2) M&A that has underdelivered (Paragon 28 sales below plan, FY26 contribution cut) — a capital-allocation judgment miss in real time; (3) reliance on "opportunistic" end-of-period orders to make quarters.

Forensic Red Flags

Acting as a forensic analyst. The accounting is clean on audit (PwC unqualified opinion on financials and on internal control over financial reporting; auditor since 2000). The risks are not fraud-flavored — they are M&A-accounting and earnings-quality risks:

• Goodwill + intangibles = ~63% of assets ($14.66B). Annual impairment test (Q4 2025): the two reporting units quantitatively tested had fair value exceeding carrying value by ">25%"; the other two passed a qualitative test. A ">25% cushion" on the tested units is comfortable-not-huge; if Paragon/Monogram revenue keeps missing, an impairment is a live multi-year risk. This is the #1 balance-sheet risk.
• GAAP↔adjusted gap is large and amortization-driven. Intangible amortization $665.9M (8.1% of sales) is the bulk of the $4.85/sh GAAP-to-adjusted wedge. Non-GAAP EPS is the consensus currency ($8.50) — legitimate for a serial acquirer, but it flatters the picture vs. $3.55 GAAP.
• Contingent consideration is a P&L swing factor. FY2025 booked $77.1M of gains from marking down Paragon/Monogram earnout liabilities on lowered revenue forecasts — i.e. the deals underperforming actually boosted GAAP operating profit via contingent-consideration reversals. Recorded contingent consideration $299.2M (YE2025); max payout range $25M–$795M through 2031 (Monogram-heavy, Monte-Carlo-valued) — a real future cash and earnings-volatility tail.
• Inventory/instruments are judgment-heavy. The ~$170M 2025 discontinuance charge sits on a $2.29B inventory book where management "must determine... how much, if any... may ultimately prove unsaleable" — recurring write-down risk in a consignment model.
• Receivables outrunning sales: AR +15% YoY vs sales +7% — partly Paragon consolidation, but worth watching for DSO creep, esp. given Europe government-payer exposure and "higher bad debt expense" cited in Asia Pacific.
• Critical audit matters (PwC): unrecognized tax benefits ($247.4M balance) and the fair-value of acquired Paragon/Monogram intangibles & contingent consideration — i.e. the auditor's own flagged judgment areas are taxes and M&A valuation.
• Open IRS dispute: proposed adjustments for 2013–2015 and 2016–2019, disputed/vigorously defended; "future payments may be significant to operating cash flows". Total litigation liabilities estimated $136.2M.

Regulatory findings (required sub-section):

• SEC EDGAR EFTS (LR + AAER): "No LR found" and "No AAER found" for Zimmer Biomet in the 2021-06-23 → 2026-06-23 window.
• 10-K Item 3 / Note 20 (Legal Proceedings): ZBH discloses involvement in "various litigation matters" — product liability, IP, stockholder, tax, commercial, employment, whistleblower/qui tam, and governmental investigations "in the normal course"; estimated aggregate litigation liability $136.2M at YE2025.
• Non-SEC enforcement (web): ZBH is a documented FCPA recidivist via legacy Biomet. 2012: Biomet entered a DOJ deferred-prosecution agreement + paid ~$17.3M for foreign bribery. Biomet breached that DPA (continued bribery — Mexican customs agents, a known-corrupt Brazil distributor); 2017: ZBH paid ~$30.5M (fines/disgorgement/interest) and entered a new 3-year DPA. The DPA was fully discharged Feb 9, 2021 — DOJ confirmed ZBH "fully met its obligations". Separately, legacy Biomet's M2A Magnum metal-on-metal hip MDL settled for ~$56M (2014). Assessment: these are legacy, resolved matters (pre-2021), not active enforcement — but they establish that the compliance culture required two bites and a court-supervised monitor to fix. Material to a governance score, not to the forward P&L.

Net forensic verdict: No evidence of accounting fraud or active SEC enforcement. The earnings-quality caveats are real (amortization-heavy adjusted EPS, contingent-consideration tailwinds from deals missing, impairment risk on 63%-of-assets intangibles) and the historical governance record is blemished. Trust the audited numbers; discount the adjusted-EPS optimism; watch goodwill.

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Phase D — Project & stress-test

Forward Projection

Built bottom-up from FY2025 actuals + management's own 2026 algorithm. Output ``; no our model created (watchlist breadth mode).

Anchor (management, FY2026): organic CC revenue +1–3%, reported +2.5–4.5%; adjusted EPS $8.40–$8.55; FCFFree cash flowCash left after paying to run and maintain the business. Unlike profit, it is hard to flatter with accounting choices. growth +9–11%.

Adjusted-EPS path (the number the market trades):

• FY2026 (base): ~$8.48 — midpoint of guidance. Drivers: +2.5–4.5% reported sales, op leverage from restructuring (~$175M run-rate savings vs 2024 by end-2027), non-recurrence of the $170M inventory charge, tariff refund — offset by higher interest, higher ETR, sales-force investment.
• FY2027 (base): ~$9.05. Bull ~$9.5 (if organic clears 4% on robotics pull-through); bear ~$8.4 (organic stalls <2%, Paragon impairment pressure).
• FY2028 (base): ~$9.65. Bull ~$10.5; bear ~$8.3 (organic decline + competitive recon share loss).

GAAP EPS stays far below adjusted (~$4–$5 range) until intangible amortization rolls off — irrelevant to consensus but the reason the GAAP P/E "looks" high.

Valuation read at ~$88:

• ~$88 / ~$8.48 = ~10.4x FY26 adjusted EPS — vs Stryker ~32x and ZBH's own ~14–16x historical norm. The discount embeds a permanent-low-growth assumption.
• A re-rate to even 14x × $9.05 (FY27) ≈ $127 is the bull math; holding ~10–11x ≈ $90–100 is the base; 8x × $8.4 ≈ $67 is the bear de-rate if organic growth is declared structurally broken. The asymmetry exists, but it is multiple-driven, not earnings-driven — you are betting on sentiment normalizing, which requires an organic-growth catalyst ZBH has not delivered in two years.

Brier forecast (for later calibration, not logged): "ZBH FY2026 (Dec-2026) adjusted diluted EPS ≥ $8.40" — p ≈ 0.80 (guidance midpoint $8.48, raised in Q1, recurring history of making adjusted EPS via buybacks/cost-out even when organic disappoints). Resolves 2027-02 with the FY2026 10-K.

Bull vs Bear

Bull case. ZBH is a deeply-discounted, self-help, market-leading franchise. (1) #1 in knees (33%) and hips (25%) — durable share in a market secularly tailwound by aging demographics and, increasingly, GLP-1 drugs that expand the surgical-candidate pool (Stryker's own framing: GLP-1s are neutral-to-positive — they slim near-obese patients to qualify for replacement). (2) Robotics is the optionality: ROSA placements drive higher-margin implant pull-through; the first outpatient robotic shoulder replacement (Apr 2026) extends the platform. (3) Restructuring (~$175M run-rate savings) + the end of the inventory charge + a $1.5B buyback shrinking the share count → adjusted EPS compounds high-single-digits even on ~3% sales. (4) The valuation: ~10–12x vs SYK's ~32x — any organic-growth proof point re-rates the stock 20–40%. The contrarian view the market refuses to see: organic growth has bottomed and the agent-to-employee transition is a self-inflicted, transitory drag that reverses in 2026–27.

Bear case (the consensus, and it has the facts). (1) Organic growth is structurally stuck at 1–3% — ~eight straight quarters of soft/declining organic revenue; the core (knees/hips ~mid-single-digit, = market) is not gaining share, and ZBH has guided down its own growth algorithm. (2) It is losing the robotics war that decides the next decade — Mako's >2,000 installs vs ROSA's chaser position; the installed-base lead compounds, and ZBH is buying (Monogram) rather than winning organically. (3) M&A is value-neutral-to-destructive: ROIC ~5% (below WACC); Paragon underdelivering; deals are margin-dilutive and the "growth" they buy keeps disappointing — even the GAAP profit is flattered by contingent-consideration reversals because the deals are missing. (4) Pricing power is gone — guiding to price declines in 2026. Pre-mortem (18 months out, thesis broken): organic CC growth printed <2% through 2026–27, Stryker took knee/hip share via Mako pull-through, Paragon goodwill was impaired, and the "12x is cheap" call was a value trap — the multiple stayed at 10x because the growth never came, and the stock drifted to the high-$70s. Are multiples too high? No — ~10–12x is low, which is the point: the bear case isn't that ZBH is overpriced, it's that it's cheap for a reason (ex-growth) and the cheapness persists.

Devil's Advocate (short-seller)

Dismantling the bull case.

• The bull case is "it's cheap." Cheap is not a catalyst. ZBH has been cheap vs SYK for two years while organic growth disappointed every quarter; the discount is the market correctly pricing a structural growth deficit, not an inefficiency.
• Where revenue is concentrated / what breaks it: ~66% of sales are knees + hips + S.E.T. recon — a low-growth, price-deflating, share-stable oligopoly. The thing that breaks it is robotics-driven share shift: if Mako (and a maturing VELYS) convert marginal surgeons, ZBH's recon "lead" erodes implant-by-implant over a hardware refresh cycle. ROSA is the #2/#3 robot; that is the most dangerous, underestimated-by-bulls threat — Stryker, via Mako installed base.
• Why the moat is weaker than bulls think: surgeon switching costs cut both ways — a hospital that installs a rival's robot re-trains surgeons onto the rival's implants. The moat protects the current book, not future share, and ZBH can't defend it on price (guiding to price declines).
• Worst capital-allocation moves: funding lower-margin, underperforming acquisitions (Paragon) with debt while ROIC sits below WACC; booking gains when those very deals miss their earnouts is an optics red flag even if GAAP-correct.
• What must hold for ~$88: that adjusted EPS compounds to ~$9–9.5 on cost-out + buybacks and the multiple doesn't de-rate further. If organic growth disappoints by 20–30% of the algorithm (i.e. ~1% instead of ~3%), the cost-out runs out, EPS growth stalls near $8.4, and an 8x multiple → ~$67.
• The single scenario that permanently impairs the business: Stryker (and J&J) win the robotics installed-base decisively, recon share inexorably bleeds from ZBH to robot-armed rivals, and a multi-billion goodwill impairment crystallizes the failed M&A — turning a 1–3% grower into a low-single-digit decliner. Plausibility: moderate — it's a slow-motion share-loss thesis, not a cliff, but it is the credible path to permanent impairment.

Management Questions (ordered by information value)

1. Strip out Paragon 28, Monogram, and FX — what was clean organic constant-currency growth each of the last 8 quarters, and what specifically reverses the trend in 2026–27 beyond "easier comps"?
2. ROSA vs. Mako: what is your current installed base and net new placements per quarter, and what is the implant pull-through uplift (revenue per robot) you actually measure?
3. On Paragon 28 underperforming plan — what changed vs. the deal model, and at what organic-growth level would you take a goodwill/intangible impairment?
4. Your ROIC is ~5%, below cost of capital. At what point do you stop acquiring and return all excess FCF — and what ROIC threshold governs the next deal?
5. You're guiding to price declines in 2026. Where, how much, and what offsets it — is this a permanent recon-pricing reset?
6. The US agent-to-employee sales-force conversion: what % is complete, what is the quantified near-term revenue drag, and when does it turn from headwind to tailwind?
7. Adjusted EPS is ~$8.50 vs. GAAP $3.55. Walk through the ~$4.85 bridge and tell me which pieces are truly one-time vs. perennial.
8. GLP-1 drugs — your evidence base: are you seeing the candidate-pool expansion in actual procedure bookings, or is that still a thesis?
9. Contingent consideration ranges $25M–$795M to 2031. What's the probability-weighted cash outflow, and how much of recent GAAP operating profit came from earnout mark-downs?
10. Goodwill + intangibles are 63% of assets. What's the impairment cushion on each of the four reporting units, not just the two you quantitatively tested?
11. What is your single highest-conviction organic growth driver for 2027, and what share of R&D ($458.5M) funds it?
12. The product lines you're discontinuing by 2032 ($170M charge) — what revenue do they represent, and is the portfolio pruning a margin story or a tacit admission of weak assets?
13. The open IRS disputes (2013–15, 2016–19): worst-case cash exposure and timing?
14. Capital structure: net debt ~$6.9B at higher rates — what's your target leverage, and does it constrain both buybacks and the next robotics acquisition?
15. If the stock is still at ~10x in 12 months, what's the board's plan — accelerate buybacks, a transformational deal, or a strategic review?

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