Zimmer Biomet (NYSE:ZBH) and AtriCure (NASDAQ:ATRC) Financial Contrast

Zimmer Biomet (NYSE:ZBH) and AtriCure (NASDAQ:ATRC) are both healthcare companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, profitability, institutional ownership, earnings, dividends, risk and analyst recommendations.

Profitability

This table compares Zimmer Biomet and AtriCure’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Zimmer Biomet	9.48%	13.12%	7.23%
AtriCure	1.85%	2.34%	1.77%

Institutional and Insider Ownership

88.9% of Zimmer Biomet shares are owned by institutional investors. Comparatively, 99.1% of AtriCure shares are owned by institutional investors. 1.3% of Zimmer Biomet shares are owned by insiders. Comparatively, 4.0% of AtriCure shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Zimmer Biomet has a beta of 0.47, suggesting that its share price is 53% less volatile than the S&P 500. Comparatively, AtriCure has a beta of 1.26, suggesting that its share price is 26% more volatile than the S&P 500.

Earnings and Valuation

This table compares Zimmer Biomet and AtriCure”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zimmer Biomet	$8.23 billion	2.14	$705.20 million	$4.11	22.46
AtriCure	$534.53 million	5.06	-$11.45 million	$0.21	253.12

Zimmer Biomet has higher revenue and earnings than AtriCure. Zimmer Biomet is trading at a lower price-to-earnings ratio than AtriCure, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and target prices for Zimmer Biomet and AtriCure, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zimmer Biomet	2	14	6	1	2.26
AtriCure	0	4	7	1	2.75

Zimmer Biomet presently has a consensus target price of $104.42, suggesting a potential upside of 13.10%. AtriCure has a consensus target price of $52.00, suggesting a potential downside of 2.17%. Given Zimmer Biomet’s higher probable upside, analysts clearly believe Zimmer Biomet is more favorable than AtriCure.

About Zimmer Biomet

Zimmer Biomet Holdings, Inc., together with its subsidiaries, operates as a medical technology company worldwide. The company designs, manufactures, and markets orthopedic reconstructive products, such as knee and hip products; S.E.T. products, including sports medicine, biologics, foot and ankle, extremities, and trauma products; craniomaxillofacial and thoracic products comprising face and skull reconstruction products, as well as products that fixate and stabilize the bones of the chest to facilitate healing or reconstruction after open heart surgery, trauma, or for deformities of the chest. It also offers robotic, surgical, and bone cement products. The company's products and solutions are used to treat patients suffering from disorders of, or injuries to, bones, joints, or supporting soft tissues. It serves orthopedic surgeons, neurosurgeons, hospitals, stocking distributors, healthcare dealers, and other specialists, as well as agents, healthcare purchasing organizations, or buying groups. The company was formerly known as Zimmer Holdings, Inc. and changed its name to Zimmer Biomet Holdings, Inc. in June 2015. Zimmer Biomet Holdings, Inc. was founded in 1927 and is headquartered in Warsaw, Indiana.

About AtriCure

AtriCure, Inc. develops, manufactures, and sells devices for surgical ablation of cardiac tissue, exclusion of the left atrial appendage, and temporarily blocking pain by ablating peripheral nerves to medical centers in the United States, Europe, the Asia-Pacific, and internationally. The company offers Isolator Synergy Clamps, single-use disposable radio frequency products; multifunctional pens and linear ablation devices, such as the MAX Pen device that enables surgeons to evaluate cardiac arrhythmias, perform temporary cardiac pacing, sensing, and stimulation, and ablate cardiac tissue with the same device; and the Coolrail device, which enables users to make longer linear lines of ablation. It also provides cryoICE Cryoablation System that enables the user to make linear ablations of varied lengths; EPi-Sense Systems, a single-use disposable device used for the treatment of symptomatic, drug-refractory, and long-standing persistent atrial fibrillation; cryoSPHERE probe, which provides temporary pain relief by applying cryothermic energy to targeted intercoastal peripheral nerves in the ribcage; AtriClip System, an implantable device coupled to a single-use disposable applier; and LARIAT System, a suture-based solution for soft-tissue closure. In addition, the company sells Lumitip dissectors to separate tissues to provide access to key anatomical structures that are targeted for ablation; Glidepath guides for placement of clamps; Subtle Cannula's to support access for EPi-Sense catheters; and various reusable cardiac surgery instruments. It markets and sells its products through independent distributors and direct sales personnel. The company was incorporated in 2000 and is headquartered in Mason, Ohio.