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Stryker Corporation (SYK)
NYSE:SYK
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Stryker
(NYSE:SYK)82Outperform
Positive Factors
Acquisition Synergies
The acquisition of Inari is expected to provide around $100m in cost savings and synergies.
Revenue Growth
High double-digit revenue growth expected to persist, with Inari sales having grown at a CAGR of approximately 52% between 2020-2023.
Negative Factors
Operating Margins Impact
Inari is expected to be dilutive by 0-20bps to operating margins and $0.20-$0.30 to EPS.
Stryker (SYK) vs. S&P 500 (SPY)
Market Cap
$147.36B
Dividend Yield0.82%
Average Volume (3M)1.43M
Price to Earnings (P/E)49.8
Beta (1Y)0.68
Revenue Growth10.23%
EPS Growth-5.74%
CountryUS
Employees53,000
SectorHealthcare
Sector Strength74
IndustryMedical Equipment & Supplies
Share Statistics
EPS (TTM)7.76
Shares Outstanding381,579,130
10 Day Avg. Volume1,330,258
30 Day Avg. Volume1,427,531
Financial Highlights & Ratios
PEG Ratio1.10
Price to Book (P/B)N/A
Price to Sales (P/S)6.52
Price to Cash Flow (P/CF)19.10
P/FCF Ratio15.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$434.24Price Target Upside11.37% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering22
Stryker Business Overview & Revenue Model
Company DescriptionStryker Corporation is a leading global medical technology company headquartered in Kalamazoo, Michigan. The company operates across three main sectors: Orthopedics, MedSurg, and Neurotechnology and Spine. Stryker's core products and services include a wide array of medical devices, surgical equipment, and innovative technologies aimed at improving patient care. The company is committed to advancing healthcare through the development of high-quality, cutting-edge solutions that address the needs of healthcare providers and patients worldwide.
How the Company Makes MoneyStryker Corporation generates revenue primarily through the sale of its diverse portfolio of medical products and technologies. The company operates in various segments, with Orthopedics focusing on implants for joint replacement and trauma surgeries. The MedSurg segment includes surgical instruments and endoscopic systems, while the Neurotechnology and Spine segment offers products for neurological and spinal treatments. Stryker's revenue model is based on both direct sales to hospitals and healthcare providers and through a network of distributors globally. The company also benefits from strategic acquisitions and partnerships that expand its product offerings and market reach. Additionally, Stryker invests heavily in research and development to drive innovation and maintain a competitive edge in the medical technology industry.
Stryker Financial Statement Overview
Summary
Stryker demonstrates strong financial health, with robust revenue growth, healthy profitability margins, and effective cash flow management. The company has improved its debt position and maintains a balanced financial structure, positioning it well for future growth.Income Statement
Stryker shows strong revenue growth with a 10.2% increase from 2023 to 2024, indicating a positive growth trajectory. The Gross Profit Margin in 2024 is robust at 63.9%, and the Net Profit Margin is healthy at 13.2%. However, there is a slight decline in EBIT Margin from 19% in 2023 to 16.3% in 2024, suggesting some pressure on operating profitability.85
Very Positive
Balance Sheet
Stryker has improved its financial stability with a reduction in total debt from 2023 to 2024, leading to a strong Debt-to-Equity Ratio of 0.068 in 2024. The Equity Ratio stands at 48%, indicating a healthy balance between debt and equity. The Return on Equity is solid at 14.5%, reflecting efficient use of equity capital.80
Positive
Cash Flow
The company exhibits strong cash flow management with a Free Cash Flow growth of 11.2% from 2023 to 2024. The Operating Cash Flow to Net Income ratio is robust at 1.42, demonstrating solid cash generation capabilities. The Free Cash Flow to Net Income ratio is also strong at 1.16, indicating efficient conversion of profits into cash.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 22.59B | 20.50B | 18.45B | 17.11B | 14.35B | Gross Profit |
| 14.44B | 13.10B | 11.58B | 10.97B | 9.06B | EBIT |
| 3.69B | 3.89B | 2.84B | 2.58B | 2.22B | EBITDA |
| 5.72B | 4.93B | 4.54B | 4.65B | 3.75B | Net Income Common Stockholders |
| 2.99B | 3.17B | 2.36B | 1.99B | 1.60B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 4.40B | 3.05B | 1.93B | 3.02B | 3.02B | Total Assets |
| 42.97B | 39.91B | 36.88B | 34.63B | 34.33B | Total Debt |
| 1.41B | 12.99B | 13.05B | 12.47B | 13.23B | Net Debt |
| -2.24B | 10.02B | 11.20B | 9.53B | 10.29B | Total Liabilities |
| 22.34B | 21.32B | 20.27B | 19.75B | 21.25B | Stockholders Equity |
| 20.63B | 18.59B | 16.62B | 14.88B | 13.08B |
| Cash Flow | Free Cash Flow | |||
| 3.49B | 3.14B | 2.04B | 2.74B | 2.79B | Operating Cash Flow |
| 4.24B | 3.71B | 2.62B | 3.26B | 3.28B | Investing Cash Flow |
| -3.00B | -962.00M | -2.92B | -859.00M | -4.70B | Financing Cash Flow |
| -525.00M | -1.59B | -749.00M | -2.37B | -11.00M |
Stryker Technical Analysis
Positive
389.92
Price Trends
380.44
Positive
376.57
Positive
359.44
Positive
Market Momentum
1.62
Positive
52.49
Neutral
61.30
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SYK, the sentiment is Positive. The current price of 389.92 is above the 20-day moving average (MA) of 389.72, above the 50-day MA of 380.44, and above the 200-day MA of 359.44, indicating a bullish trend. The MACD of 1.62 indicates Positive momentum. The RSI at 52.49 is Neutral, neither overbought nor oversold. The STOCH value of 61.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SYK.
Stryker Risk Analysis
Stryker disclosed 29 risk factors in its most recent earnings report. Stryker reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Stryker Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $147.36B | 49.75 | 14.51% | 0.82% | 10.23% | -5.74% | |
78 Outperform | $152.91B | 83.05 | 9.03% | ― | 17.60% | 16.84% | |
78 Outperform | $202.22B | 87.00 | 15.62% | ― | 17.24% | 27.76% | |
78 Outperform | $398.27B | 28.57 | 19.68% | 2.96% | -4.51% | 3.69% | |
77 Outperform | $119.32B | 28.28 | 8.63% | 2.96% | 2.72% | 4.48% | |
71 Outperform | $20.77B | 23.53 | 7.25% | 0.92% | 3.84% | -9.29% | |
49 Neutral | $7.05B | 0.34 | -55.09% | 2.46% | 25.27% | -3.43% |
* Healthcare Sector Average
Performance Comparison
SYK
Stryker
389.92
40.75
11.67%
BSX
Boston Scientific
103.61
36.59
54.60%
ISRG
Intuitive Surgical
557.96
170.64
44.06%
JNJ
Johnson & Johnson
165.42
10.42
6.72%
MDT
Medtronic
93.03
11.22
13.71%
ZBH
Zimmer Biomet Holdings
103.99
-19.73
-15.95%
Stryker Earnings Call Summary
Earnings Call Date: Jan 28, 2025 | % Change Since: -1.32% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
The earnings call reflected strong performance and growth across multiple segments, driven by successful product launches and strategic acquisitions. Despite challenges in the Spinal Implants business and foreign currency impacts, the company's robust operating margin expansion and high growth in key areas suggest positive momentum going into 2025.Highlights
Strong Organic Sales Growth
Organic sales growth exceeded 10% for both Q4 and the full year of 2024, with the U.S. seeing a 10.6% increase and international sales growing by 8.8%.
Successful Product Launches
Successful product launches including the LIFEPAK 35 and Pangea plating system drove strong sales and robust customer interest.
Mako System Expansion
Record quarter and year of installations for the Mako system in the U.S. and worldwide, with increasing utilization in knee and hip procedures.
Acquisition of Inari
Stryker announced the acquisition of Inari, entering the peripheral vascular market with a $15 billion addressable opportunity, supported by Inari's high gross margin profile.
Operating Margin Expansion
Achieved a 200 basis point improvement in Q4 operating margins and a 110 basis point improvement for the full year versus 2023.
Lowlights
Challenges in Spinal Implants Business
The Spinal Implants business faced challenges in achieving performance expectations, leading to its planned divestiture.
Impact of Foreign Currency
Foreign currency had a 0.5% unfavorable impact on sales and negatively impacted adjusted EPS by $0.05 for Q4 and $0.13 for the full year.
Company Guidance
During the fourth quarter 2024 earnings call, Stryker provided comprehensive guidance, projecting an 8% to 9% organic sales growth for 2025, reflecting the high end of the med tech sector. This growth, coupled with continued operating margin expansion, translates to an adjusted EPS forecast between $13.45 and $13.70, excluding the impacts of the Inari acquisition. The company exceeded its adjusted operating margin goals for 2024, achieving a 200 basis point improvement in Q4 and 110 basis points for the full year. Earnings highlighted a quarterly and full-year adjusted EPS growth of 16% and 15%, respectively. Stryker also announced the sale of its Spinal Implants business to focus resources better and capitalize on high-growth markets, while maintaining enthusiasm for Interventional Spine and enabling technologies.Stryker Corporate Events
Executive/Board Changes
Stryker Announces CFO Transition Effective April 2025
Neutral
Jan 28, 2025
On January 28, 2025, Stryker announced the retirement of Glenn S. Boehnlein from his role as Vice President, Chief Financial Officer, effective April 1, 2025. Preston Wells, currently Vice President, Group Chief Financial Officer for Orthopaedics, will be promoted to Vice President, Chief Financial Officer on the same date. This leadership transition is expected to support Stryker’s ongoing growth, with Wells’s extensive experience in financial management and strategic leadership set to enhance the company’s operations and market position.
M&A TransactionsBusiness Operations and Strategy
Stryker’s Strategic Acquisition of Inari Medical Announced
Positive
Jan 7, 2025
Stryker Corporation has announced a definitive agreement to acquire Inari Medical, Inc. for $80 per share, with a total equity value of approximately $4.9 billion. This acquisition is set to enhance Stryker’s position in the peripheral vascular segment, expanding its portfolio with Inari’s innovative solutions for venous thromboembolism, complementing Stryker’s existing Neurovascular business. The transaction, expected to close by the first quarter of 2025, aims to improve patient outcomes and elevate the standard of care in endovascular procedures.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.