QS Research · Michael Burry's Scion Capital analyst template · 2006
STRYKER CORP (SYK)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case none · downside -24% · upside +21%
Stryker is still a high-quality secular medtech compounder: TTM revenue is $26.30B, EBITDA $7.05B, free cash flow $4.57B, and gross margin 65.3%, with FY2020-FY2025 revenue up from $14.35B to $25.12B and operating income from $2.22B to $4.89B. But at $325.87 the stock already trades at 19.3x EV/EBITDA and 34.2x P/E; at today's multiple the base case is roughly today's price, while the 15x downside is about -24% and the 23x upside about +21%. The October 2026 guidance cut and the peripheral-vascular manufacturing/cyber issues explain why the stock is below its high, but they do not yet create a greater-than-30% base-case discount. This is a watch, not a long or short: quality is not in doubt, but risk/reward is close to symmetric until EBITDA growth reaccelerates or the price falls toward the downside case.
Key numbers
- Share price: $325.87
- Market cap: $124.06B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $26.30B
- EV / EBITDA (TTM): 19.3x
- P/E (TTM): 34.2x
The 15 boxes
- ✓ 1. Long-form business notes
Stryker is a medical-technology company that sells implants, surgical equipment, endoscopy, medical, vascular and neuro-cranial products through direct sales and distributors; in FY2025 it reports two segments, MedSurg and Neurotechnology (62% of $25,116M net sales) and Orthopaedics (38%). The business changed from three reportable segments in FY2020 (total $14,351M) to two in FY2025, with acquisitions including Wright in 2020 and Inari in 2025 and Mako robotics now in more than 45 countries. FY2020-FY2025 XBRL shows revenue rising from $14.35B to $25.12B, operating income from $2.22B to $4.89B, and operating cash flow from $3.28B to $5.04B. The provided sources do not disclose unit economics.
- ✓ 2. Competitive advantage
The numbers in the filings support a durable, scale-and-franchise advantage rather than a commodity position: gross margin sat in a 62.8%-64.1% band in every year FY2020-FY2025 (64.0% in FY2025), operating margin rose from 15.5% of revenue in FY2020 to 19.5% in FY2025, revenue grew every year shown ($14.35B to $25.12B), and FY2025 operating cash flow of $5.04B was about 1.55x net income. The filings themselves, however, describe a highly competitive, innovation-driven market with China volume-based procurement, provider consolidation and distributor dependence, and state that Stryker has cut prices on some products because of competition. No competitor is named and no equity figure is disclosed, so the return side of the moat cannot be measured from these sources.
- ✓ 3. 10-Q takeaways
Q3 2026 net sales rose 7.7% to $6,520M, all organic and volume-led (unit volume +7.6%, price +0.1%), but management said the quarter fell short of its own expectations. Reported Q3 2026 operating margin fell to 15.9% from 18.7% on a $293M Peripheral Vascular goodwill impairment, while adjusted operating margin rose 60 bps to 26.2% and adjusted EPS rose 10.3% to $3.52. Nine-month 2026 sales were $19,129M (+6.6% reported, +5.9% constant currency), operating margin 19.0% vs 17.2%, adjusted EPS $9.81 (+7.1%); nine-month operating cash flow was $3,303M and the company repurchased $1.0B of stock in Q3 2026 before a $3.0B authorization increase in October 2026. FY2026 guidance is organic sales growth of 6.5%-7.0% and adjusted EPS of $14.80-$14.90; Item 1A reports no material change in risk factors.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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