It has been about a month since the last earnings report for Zimmer Biomet (ZBH). Shares have lost about 7.7% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Zimmer due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. Zimmer Biomet Gains From Strength in S.E.T Arm in Q3Zimmer Biometreported third-quarter 2018 adjusted earnings per share of $1.63, down 5.2% year over year but ahead of the Zacks Consensus Estimate of $1.60.Reportedly, net earnings came in at 79 cents per share, a 64.6% increase from the year-ago quarter’s figure.Revenue DetailsThird-quarter net sales came in at $1.84 billion, marking a 1.3% increase (up 2.3% at constant exchange rate or CER) year over year. Net sales exceeded the Zacks Consensus Estimate by a small margin.During the quarter under review, sales generated in the Americas totaled $1.15 billion (up 1.5% year over year at CER), while the same in EMEA (Europe, the Middle East and Africa) grossed $372 million (flat year over year at CER). Asia-Pacific, however, registered 7.6% growth at CER to $311 million.SegmentsSales at Knees were up 2.1% year over year at CER to $628 million. Hips recorded a 3.9% increase at CER from the prior-year quarter to $445 million. Revenues from S.E.T. (Surgical, Sports Medicine, Foot and Ankle, Extremities and Trauma) were up 3.1% year over year to $415 million.Among the other segments, Spine & CMF were up 0.7% at CER to $185 million, while Dental declined 0.2% to $92 million. Other revenues were down 3.3% to $72 million.MarginsGross margin came in at 71.2%, reflecting a contraction of 117 bps in the third quarter. Selling, general and administrative expenses were up 10.7% to $787.7 million. Further, research and development expenses rose 4.9% to $95.7 million. Adjusted operating margin declined 499 bps to 23.1% during the quarter.Cash PositionZimmer Biomet exited the third quarter with cash and cash equivalents of $524.6 million, compared with $481.2 million at the end of the second quarter. Total long-term debt was $9.19 billion compared with $9.51 billion as of preceding quarter-end.Year-to-date operating cash flow was $1.37 billion compared with $1.18 billion in the year-ago period. The company also paid $48.8 million in dividends during the quarter.Update on 2018 OutlookThe company has made minor update to its full-year 2018 guidance which are as follows:Zimmer Biomet now expects the positive impact of foreign currency translation to be slightly below the low end of the previous range of 100 to 150 basis points.It also expects the adjusted effective tax rate for 2018 to be slightly below the low end of the previous range of 18.5% to 19.5%.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in fresh estimates.VGM ScoresAt this time, Zimmer has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Zimmer has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Zimmer Biomet Holdings, Inc. (ZBH): Free Stock Analysis Report To read this article on Zacks.com click here.