QS Research · Michael Burry's Scion Capital analyst template · 2006
STRYKER CORP (SYK)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case -7% · downside -18% · upside +12%
At $325.87 the market pays 19.3x TTM EBITDA and 34.2x TTM P/E for a business whose Q3 2026 missed and whose FY2026 guide was cut to 6.5%-7.0% organic growth and $14.80-$14.90 adjusted EPS. I use the section-13 TTM base, not a cycle average: $26.30B revenue, $7.05B EBITDA and $4.57B FCF. Base value at 18.0x EV/EBITDA: $7.05B x 18.0 = $126.9B EV, less ~$11.7B net debt = $115.2B equity, -7.1% versus $124.06B; the 16.0x downside is -18.5% and the 19.3x-plus-11%-EBITDA-growth upside is +12.4%. That does not meet the short rule (base not -30%) and is nowhere near the long rule, so this is a watch: a quality franchise, but the multiple still discounts a recovery Stryker has not yet proved. The market is not missing the franchise; it may be underappreciating how temporary the cyber/SAP/peripheral-vascular issues are, but not enough to pay 19x for that uncertainty.
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 selling implants, surgical equipment and related products in two FY2025 segments: MedSurg and Neurotechnology ($15,647M, 62% of $25,116M net sales) and Orthopaedics ($9,469M, 38%). It sells in approximately 61 countries, mostly direct to doctors/hospitals, and reports FY2025 revenue $25.12B, operating income $4.89B, net income $3.25B and operating cash flow $5.04B. The oldest report here (FY2020) had three segments and $14,351M net sales; since then the segment structure changed to two, Wright (2020) and Inari (2025) were acquired, and Mako expanded. Sources give no unit-level economics or one-off itemization.
- ✓ 2. Competitive advantage
FY2020-FY2025 data show a scaled, high-gross-margin business: FY2025 revenue $25.12B, gross profit $16.07B (64.0%), operating income $4.89B, and operating cash flow $5.04B. That margin stability is consistent with product differentiation or pricing power, but the 10-K describes a highly competitive industry with pricing pressure, rapid technology change, sole-source supply and indirect distribution. The sources name no specific competitors or market share and do not quantify returns on capital, so they do not establish a durable moat.
- ✓ 3. 10-Q takeaways
Q3 2026 sales grew 7.7% organically to $6,520M, but GAAP operating margin compressed to 15.9% on a $293M Peripheral Vascular goodwill impairment; adjusted operating margin rose 60 bps to 26.2% and adjusted EPS was $3.52. Nine-month 2026 operating cash flow was $3,303M, while financing used $2,998M including $1,000M of buybacks and $1,000M of debt repayment. The 10-Q gives no numeric guidance, expects unfavorable segment mix, and S29 leaves risk factors unchanged.
- ✓ 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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