Breaking Down Paragon 28, Inc. (FNA) Financial Health: Key Insights for Investors

You're looking for the real story on Paragon 28, Inc. (FNA), and honestly, the narrative shifted dramatically this year: the company is no longer a standalone public entity, having been acquired by Zimmer Biomet Holdings, Inc. on April 21, 2025. Still, understanding its final public-company momentum is crucial for valuing its contribution to the new parent company, and the numbers show a compelling growth story right up to the delisting.

The analyst consensus for the full 2025 fiscal year projected revenue to hit $294.31 million, a solid 14.88% jump from the prior year, driven by their deep portfolio of nearly 80 foot and ankle product systems. That top-line growth was the clear opportunity, but the risk was always the bottom line; Paragon 28 was still working toward profitability, with the 2025 Earnings Per Share (EPS) projected at a loss of -$0.47-an improvement, but a loss nonetheless. Management was defintely focused, though, targeting EBITDA positivity for 2025. The core takeaway is this: you bought into a high-growth, innovative medical device firm that was successfully acquired before it could fully execute its path to net profitability.

Revenue Analysis

You need a clear picture of where Paragon 28, Inc.'s (FNA) growth was coming from right before the Zimmer Biomet Holdings, Inc. acquisition in April 2025. The direct takeaway is that the company was a strong growth story, with full-year 2024 revenue hitting over a quarter-billion dollars and a key acceleration happening in international markets.

For the last full year of independent reporting, Paragon 28, Inc. delivered net revenue of approximately $256.2 million in 2024, representing an impressive year-over-year growth rate of around 18.3%. This consistent double-digit growth is what made the company an attractive acquisition target. To be fair, the full 2025 fiscal year data for an independent Paragon 28, Inc. is limited to the first quarter, as the merger closed on April 21, 2025.

Near-Term Revenue Streams and Growth Drivers

The company's primary revenue stream is the sale of specialized foot and ankle surgical solutions, which are essentially high-margin medical devices (implants and instruments). This is a pure-play model focused entirely on the orthopedic foot and ankle market. The product portfolio is robust, consisting of nearly 80 product systems, which helps surgeons find a specific solution for almost any procedure.

Here's the quick math on the start of 2025: Based on the strong momentum from 2024, and applying an estimated 18.2% growth rate-consistent with recent trends-to the Q1 2024 revenue of $61.1 million, the company's Q1 2025 net revenue is estimated to be around $72.2 million. This figure represents the last full quarter of independent performance and shows the growth trajectory was defintely intact.

• Product Categories: Revenue is generated from core segments like plating systems (e.g., Gorilla and Silverback lines), various screw systems (Monster, Mini Monster, Joust), and the APEX 3D total ankle replacement system.
• Innovation Pipeline: New product launches, such as the Phantom Fibula Nail System, are crucial; they drive adoption and market share gains, which directly translates to revenue growth.
• Orthobiologics: The sale of biological products (like bone grafts and matrices) also contributes, adding a complementary revenue stream to the hardware.

Geographic Revenue Contribution Shift

While the majority of Paragon 28, Inc.'s revenue historically came from the United States, the international segment was the clear growth accelerator. This shift is a critical point for investors to understand the pre-acquisition momentum.

You can see the dramatic difference in growth rates when you look at the Q1 2024 numbers. The U.S. net revenue grew a solid 13.5%, but the international revenue surged by over 42.2% in the same period. This international expansion is a significant opportunity that Zimmer Biomet Holdings, Inc. now gets to capitalize on, leveraging their global distribution network.

This geographic breakdown shows that the company was successfully executing a strategy of market penetration outside of its core U.S. base. The high growth in foreign markets suggests a lower initial penetration rate and a long runway for continued expansion, which is a strong indicator of a healthy business model. If you are interested in the players behind this performance, check out Exploring Paragon 28, Inc. (FNA) Investor Profile: Who's Buying and Why?

Profitability Metrics

You're looking at Paragon 28, Inc. (FNA) and asking the right question: can their impressive revenue growth translate into real profit? The short answer is that while their gross margin is excellent, the company is still deep in the red on a net basis, though management is laser-focused on a critical turnaround in 2025. It's a classic growth-vs-profit story.

For the full fiscal year 2024, Paragon 28, Inc. reported total revenue of $256.18 million. This strong top-line growth is a good sign, but the bottom line (net profit) tells a different story about their current financial health. Here's the quick math on their core margins for 2024, which sets the stage for their 2025 goals:

• Gross Profit Margin: A robust 74.75%.
• Operating Profit Margin: A loss of -15.92%.
• Net Profit Margin: A loss of -21.33%.

Gross Margin Strength and Operational Efficiency

The gross profit margin is the single best indicator of a medical device company's pricing power and manufacturing cost control. Paragon 28, Inc. shows real strength here, with a 2024 Gross Profit of $191.49 million, translating to a 74.75% margin. That's a high-quality gross margin, defintely competitive within the orthopedic space, suggesting their specialized foot and ankle products command premium pricing and their cost of goods sold (COGS) is well-managed. This is where the business model works.

However, the trend shows a slight dip, as the gross margin for the nine months ended September 30, 2024, was 75.5%, compared to 78.3% for the same period in 2023. This small decline, while still keeping the margin high, suggests rising COGS or a shift in product mix, which is something to watch closely.

The Path to 2025 Profitability

The real challenge is the operating loss, which totaled -$40.78 million in 2024. This is where the company spends heavily on sales, general, and administrative (SG&A) costs, plus research and development (R&D) to drive future growth. The company's focus for the 2025 fiscal year is to bridge this gap. Management has explicitly targeted achieving EBITDA positivity in 2025. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) positivity is a key milestone for growth-stage companies, showing that core operations are generating cash before non-cash expenses and financing costs.

Analysts project revenue growth of over 17% for the next few years. If we project 17% growth from the 2024 revenue of $256.18 million, the 2025 revenue would be approximately $300 million. Achieving EBITDA positivity on this higher revenue base will require tight control over operating expenses (OpEx), a strategy the company has already signaled with expected annualized OpEx savings.

Industry Comparison: The Margin Gap

When you compare Paragon 28, Inc. to the broader medical device industry, the profitability gap is stark. The average net margin for the Health Care Equipment & Supplies sector is significantly higher, with Paragon 28, Inc.'s -21.33% Net Profit Margin being 98.1% lower than the sector average.

For context, larger, more mature orthopedic players are targeting high double-digit operating margins. For instance, Smith & Nephew has a 2025 adjusted operating margin target of 19% to 20%. Paragon 28, Inc.'s journey is about moving from its current negative operating margin to a positive one. The high gross margin gives them a huge buffer to work with, but they need to scale sales faster than OpEx. You can read more about the company's full financial picture in Breaking Down Paragon 28, Inc. (FNA) Financial Health: Key Insights for Investors.

What this estimate hides is the risk of a slowdown in procedure volumes, which would instantly derail the 2025 EBITDA goal. Your action now should be to track Q4 2024 and Q1 2025 earnings releases for concrete proof of operating expense leverage.

Debt vs. Equity Structure

You're looking at Paragon 28, Inc. (FNA)'s balance sheet to see how they fund their growth, and the short answer is: they utilize a balanced mix, but the 2025 story is really about a massive, equity-driven exit. The company's debt-to-equity ratio sits around 0.85 on a trailing twelve-month (TTM) basis, which is slightly higher than the medical device industry median of 0.70.

This tells you Paragon 28, Inc. has been comfortable using debt to fuel its expansion, which is common for a growth-focused medical device company building out its product portfolio and sales channels. But, to be fair, a ratio of 0.85 is defintely manageable. It means for every dollar of shareholder equity (the book value of the company), they have about 85 cents in total debt.

Here's the quick math on their leverage:

• Total Debt (TTM): Approximately $110.69 million
• Long-Term Debt (Net, as of June 30, 2024): $109.913 million
• Debt-to-Equity Ratio (TTM): 0.85

The vast majority of their debt is long-term, signaling a focus on financing durable assets like surgical instrumentation sets and long-term operating needs, not just covering day-to-day bills. Short-term debt is a minimal concern here. Still, the negative cash flow from operations, which persisted through Q4 2024, shows the debt was necessary to bridge the gap while scaling up.

2025's Major Capital Structure Shift: The Zimmer Biomet Deal

Forget talking about minor debt issuances or credit ratings for 2025; the biggest capital event is the proposed acquisition by Zimmer, Inc., a subsidiary of Zimmer Biomet Holdings, Inc. This merger agreement, signed on January 28, 2025, fundamentally changes the outlook for Paragon 28, Inc.'s capital structure.

This is the ultimate form of equity funding-a buyout. The terms offer shareholders $13.00 in cash per share, plus a contractual contingent value right (CVR) of up to an additional $1.00 per share. This move effectively transitions the company from a publicly-traded entity balancing debt and equity to a wholly-owned subsidiary, where the parent company, Zimmer Biomet, will manage the capital structure. The debt-to-equity ratio becomes a moot point for public investors once the deal closes, as the equity is converted into cash and CVRs. For a deeper dive into who's buying and why, you can check out Exploring Paragon 28, Inc. (FNA) Investor Profile: Who's Buying and Why?

What this estimate hides is the fact that the CVR portion introduces a variable, performance-based element to the final payout, tying a portion of the equity value to future revenue thresholds. This is a common way to split risk and opportunity in M&A. The core takeaway is simple: the company's near-term financing strategy isn't about new debt; it's about a clean equity-based exit.

Liquidity and Solvency

When you look at Paragon 28, Inc.'s short-term financial health-its liquidity-the ratios tell a story of strength, but the cash flow reveals the underlying challenge that was ultimately solved by a major corporate action. Liquidity is simply the ability to cover your immediate bills, and Paragon 28, Inc. was well-positioned to do that, even while burning cash from operations.

The company's latest available liquidity positions, based on the most recent TTM (Trailing Twelve Months) data leading up to the acquisition in 2025, were defintely robust. The Current Ratio sits around 3.51, which is excellent. Here's the quick math: for every dollar of short-term debt, Paragon 28, Inc. had $3.51 in current assets to cover it. A ratio of 2.0 or higher is generally considered healthy, so this is a strong cushion.

Also, the Quick Ratio (or acid-test ratio), which strips out inventory-a less liquid asset for a medical device company-was approximately 1.55. This is another strong signal. It means the company could cover its current liabilities 1.55 times over using only its most liquid assets like cash and accounts receivable. That's a comfort for any short-term creditor.

The working capital trend for Paragon 28, Inc. was positive, landing at approximately $120.71 million. Working capital (Current Assets minus Current Liabilities) is the capital available for day-to-day operations, and a positive number this large shows a significant buffer. Still, a deeper look at the components shows where the cash was going, and you need to keep an eye on inventory levels in this sector, as they can be high due to the instrument set requirements for surgeons.

Cash Flow Statements Overview

The cash flow statement gives you the real picture of how money is moving, and this is where the realism comes in. Despite the strong balance sheet ratios, Paragon 28, Inc. was not yet a self-sustaining business from an operational cash perspective. For the TTM period ending in 2025, the Operating Cash Flow was a negative -$27.15 million.

This negative operating cash flow means the company's core business activities-selling foot and ankle solutions-were consuming cash, not generating it. This is not uncommon for high-growth medical device companies that invest heavily in sales force expansion and inventory for new product launches. The other cash flow trends break down like this:

• Operating Cash Flow: Negative -$27.15 million. The business was spending more cash on operations than it was bringing in.
• Investing Cash Flow: Negative, with Capital Expenditures (CapEx) at around -$15.80 million. This negative number is a good sign, as it reflects the continued investment in property, plant, and equipment, which is necessary for growth in this industry.
• Financing Cash Flow: The ultimate financing event was the acquisition by Zimmer Biomet Holdings, Inc., which was agreed upon in January 2025. This event provided a definitive cash-out for shareholders and resolved any long-term financing needs or liquidity concerns.

Here's a snapshot of the core liquidity metrics:

Potential Liquidity Concerns or Strengths

The strength of the current and quick ratios shows that Paragon 28, Inc. was in no immediate danger of defaulting on its short-term obligations. That's a major strength. But the sustained negative operating cash flow was the clear, near-term risk. A company can't burn $27.15 million in cash forever without external financing or a path to profitability.

However, the acquisition by Zimmer Biomet Holdings, Inc., which valued Paragon 28, Inc. at $13.00 per share in cash plus a contingent value right up to $1.00 per share, fundamentally changed the liquidity profile for the company and its shareholders. The acquisition removed the liquidity risk entirely by integrating Paragon 28, Inc. into a much larger, cash-generating parent company. The key takeaway is that the company's high-growth strategy, while creating a short-term cash burn, was validated by a strategic buyer. If you want to know more about the players involved in this move, you should check out Exploring Paragon 28, Inc. (FNA) Investor Profile: Who's Buying and Why?

Valuation Analysis

You're looking at Paragon 28, Inc. (FNA) and asking the core question: was it overvalued or undervalued? The answer is complex, especially since the stock was delisted on April 21, 2025, following its acquisition by Zimmer Biomet (ZBH). Your valuation must be viewed through that lens, as the last trade price of $13.09 on April 17, 2025, essentially capped the public market's assessment.

The company was a classic growth stock in the medical device space, focusing exclusively on the foot and ankle orthopedic market. Growth companies often trade at a premium, and Paragon 28 was no exception, showing a 52-week price increase of +35.79% leading up to the acquisition announcement. Its volatility, with a 52-week range between $9.44 and $13.13, was also higher than the market average, indicated by a Beta of 1.47. This is a defintely a high-risk, high-reward profile.

Key Valuation Multiples (Fiscal Year 2025)

Since Paragon 28 was not yet profitable, traditional earnings-based metrics pointed to a high valuation, which is common for companies prioritizing market share and R&D over near-term profit. Here's a quick math on the trailing 12-month (TTM) metrics as of late 2025, just before the final delisting:

• Price-to-Earnings (P/E) Ratio: The P/E ratio was a negative -20.7. Because the company had negative earnings per share (EPS), a negative P/E simply tells you it's losing money, not that it's cheap.
• Price-to-Book (P/B) Ratio: At approximately 8.41, the P/B ratio was quite high. This means investors were willing to pay over eight dollars for every dollar of the company's net assets (its book value). This premium signals strong market confidence in the future value of its intellectual property and growth trajectory, which you can read more about in the Mission Statement, Vision, & Core Values of Paragon 28, Inc. (FNA).
• Enterprise Value-to-EBITDA (EV/EBITDA): This metric was also negative, at around -50.20, due to negative Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA). A negative EV/EBITDA, like P/E, confirms the company was burning cash from an operational standpoint, but its Enterprise Value (EV) was still substantial at approximately $1.18 billion.

Analyst Consensus and Dividend Profile

The consensus from the analyst community in late 2025 was a Hold rating, suggesting most professionals felt the stock was fairly priced at the time, or that the risks balanced the growth potential. The average analyst price target ranged from $13.00 to $14.50, with the low end matching the final trading price of $13.09.

As a growth-focused medical device company, Paragon 28 did not pay a dividend. Its dividend yield and payout ratio were both 0.00%, as all capital was being reinvested into the business to fuel expansion and product development. For investors, this meant the entire return thesis was based on capital appreciation, not income.

What this estimate hides is the acquisition premium. The final valuation was ultimately determined by the acquiring company, Zimmer Biomet, which saw enough strategic and future value to pay the price that led to the delisting.

Risk Factors

You need to look past the strong revenue growth-Paragon 28, Inc. (FNA) reported 18% year-over-year net revenue growth for 2024, hitting the $255.9 million to $256.2 million range-and focus on the risks that drove the company toward the Zimmer Biomet acquisition. The biggest near-term risk is the deal itself. It's defintely the main factor for investors right now.

The core of the risk profile is the pending merger with Zimmer Biomet. The deal, announced in January 2025, is expected to close in the first half of 2025, but it's not a done deal until it is. A key condition is regulatory approval, though the company's relatively small 7% share of the U.S. foot and ankle orthopedics market suggests antitrust concerns are low. Still, if the merger fails, Paragon 28, Inc. would owe a termination fee of $40 million under certain circumstances, a significant financial hit for a company aiming for EBITDA positivity in 2025. Here's the quick math: the stock would likely fall well below the cash offer of $13.00 per share if the deal breaks.

Beyond the merger, the company faces inherent operational and financial headwinds that the acquisition is meant to solve.

• Competitive and Pricing Pressure: The foot and ankle market is highly competitive, featuring larger, diversified players. This creates constant downward pricing pressure on medical devices, which directly impacts Paragon 28, Inc.'s margins. The rise of advanced robotics systems in orthopedics also presents a new competitive threat.
• Financial Runway and Profitability: On a standalone basis, the company's business plan involved years of negative cash flow. As of a recent filing, the company carried approximately $111 million in long-term indebtedness. While management aimed for positive Adjusted EBITDA in 2025 and positive free cash flow by 2026, missing those targets would necessitate raising additional capital, which dilutes shareholder value.
• Supply Chain and Manufacturing Reliance: Like many medical device firms, Paragon 28, Inc. relies heavily on third-party manufacturers. Any disruption, quality control issue, or sudden price increase from these suppliers directly impacts their ability to meet demand and control costs.

The Contingent Value Right (CVR) also adds a layer of uncertainty for investors. The additional payout of up to $1.00 per share is contingent on Paragon 28, Inc. hitting a net revenue target in 2026. To get the maximum payout, the business needs to grow net revenue to $361 million, which requires maintaining an aggressive compound annual growth rate (CAGR) of about 19% over two years from the 2024 base. This CVR is a clear financial risk tied to future performance.

Mitigation and Strategic Actions

The primary mitigation strategy is the merger itself. Joining Zimmer Biomet provides the necessary financial stability and scale to weather competitive storms and fund the substantial R&D needed to stay ahead. The company's pre-merger strategy focused on continuous innovation and commercial expansion, which will now be supercharged by the larger parent company. They have a robust intellectual property portfolio of 366 owned and issued patents to protect their innovations.

The table below summarizes the key financial risk targets and the strategic response.

If you're looking for more details on the company's financial metrics that influenced this strategic decision, you should check out the full post on Breaking Down Paragon 28, Inc. (FNA) Financial Health: Key Insights for Investors.

Growth Opportunities

You're looking at Paragon 28, Inc. (FNA) right now, and the biggest near-term factor is the definitive agreement for its acquisition by Zimmer Biomet, expected to close in the first half of 2025. This isn't just a sale; it's a strategic alignment that fundamentally changes the growth equation for Paragon 28, Inc.'s specialized foot and ankle business.

The core growth drivers remain strong, but they are now amplified by Zimmer Biomet's global scale. Paragon 28, Inc. has a competitive advantage as a 'one-stop shop' in the foot and ankle segment, offering nearly 80 product systems, which is a key differentiator against smaller competitors. The company is focused on innovation, launching 13 new products in 2024, a significant ramp-up that acts as a strong tailwind for future sales.

Here's the quick math on the expected revenue trajectory. Paragon 28, Inc.'s preliminary unaudited net revenue for 2024 was in the range of $255.9 million to $256.2 million. The most concrete future projection is tied to the Contingent Value Right (CVR) in the acquisition, which pays out fully if net sales hit $361 million in Zimmer Biomet's fiscal year 2026. This implies a Compound Annual Growth Rate (CAGR) of roughly 19% over two years. So, a realistic 2025 net revenue projection, assuming this growth momentum continues, is approximately $304.7 million.

What this estimate hides is the immediate impact of the merger on earnings. For Zimmer Biomet, the transaction is expected to be about 3% dilutive to their adjusted earnings per share in 2025. Still, Paragon 28, Inc.'s management is targeting EBITDA positivity in 2025, a critical step toward financial maturity for the underlying business.

The strategic initiatives driving this growth are clear and actionable:

• Market Expansion: The acquisition provides immediate access to Zimmer Biomet's extensive global footprint, accelerating U.S. and international growth.
• Cross-Selling: There are significant cross-selling opportunities, especially in the rapidly growing Ambulatory Surgery Center (ASC) space, which is a $5 billion market.
• Geographic Penetration: The pre-merger plan to enter the Japan market in 2025 is a key independent expansion effort that will now be supported by a larger infrastructure.

The merger is defintely the catalyst here. It provides the resources needed to scale the innovation that Paragon 28, Inc. has already proven it can deliver. For a deeper dive into the company's financial stability, you should check out the full analysis at Breaking Down Paragon 28, Inc. (FNA) Financial Health: Key Insights for Investors.

The key risk to watch is execution on the integration and the realization of those cross-selling synergies; if onboarding takes 14+ days, churn risk rises, even for surgeons. The competitive advantage is in their specialized focus, but they need to maintain the high pace of innovation that brought them to this point. The following table summarizes the key financial growth data for context: