SYK US S&P 500Russell 1000 Earnings call
Stryker Corporation (SYK) · Q2 2026 results and valuation
Share price: $318.79 · 2026-11-11
Stryker Corporation provides medical technologies, including surgical equipment, implants for joint replacements and trauma, and neurotechnology products. The company sells these products to doctors, hospitals, and other healthcare facilities in numerous countries worldwide. Source: 10-K annual report (2026-02-11)
Results Q2 2026 vs Q1 2026 · previous quarter · published 30 Jul 2026 and 30 Apr 2026
Net income up 71.3% on the previous quarter. Management sounded cautious, in its script and in answers to analysts.
1 · Numbers
+71.3%
Net income vs Q1 2026
Outlook given
Net income 1.28B vs 745.0M
Revenue +9.5%
Against the same quarter last year (Q2 2025) it is +44.3%, so it is not just seasonal.
Why Against the same quarter last year (+44.3%), net income rose because of improved gross margins, a net benefit from tariff-related costs, improved business mix, and cost discipline, including lower adjusted SG&A as a percentage of sales.
2 · How management spoke
Cautious
Among the least upbeat of all company calls
Answers to analysts: upbeat, in line with the script.
Similar to last call.
3 · What stood out
Stryker Corporation narrowed its full-year guidance to organic net sales growth of 8.3% to 9.3% and adjusted net earnings per share of $14.95 to $15.10.
Valuation
Is Stryker Corporation undervalued?
Reverse DCF. Free cash flow from the last full fiscal year (2025-12-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 10.8% growth a year (3-year revenue growth), the model's fair value is $250.38 a share — the stock trades 27% above it. Today's price assumes 13.8% growth a year.
Current price
$318.79
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+13.8% for 10 yrs
Fair value / share
$250.38
Buy below
$187.79
Price vs fair value
Overvalued 27%
Price vs buy-below price
Overvalued 70%
Management expects
Sales +8.8% · from the Q2 2026 report: “SYK narrowed its full-year guidance to organic net sales growth of 8.3% to 9.3% and adjusted net earnings per share of $14.95 to $15.10 due to year-to-date…”
A guidance figure for sales, usually one year ahead, not a 10-year free-cash-flow rate.
Read between the lines
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Guidance
SYK narrowed its full-year guidance to organic net sales growth of 8.3% to 9.3% and adjusted net earnings per share of $14.95 to $15.10 due to year-to-date results.
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Figure
SYK achieved adjusted EPS growth of 17.9% compared to the previous quarter due to improved gross margins and rigorous operational execution.
Source quote
“From an earnings perspective, we delivered adjusted EPS growth of 17.9% reflecting improved gross margins as well as our ongoing commitment to rigorous operational execution.”
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Figure
Adjusted earnings per share rose to $3.69, an increase of $0.56 or 17.9% from the same quarter last year.
Source quote
“Adjusted earnings per share of $3.69 was up $0.56 or 17.9% from the same quarter last year.”
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Figure
Organic sales growth was 9% for the quarter, down from the double-digit comparable reported in the second quarter of 25.
Source quote
“Organic sales growth was 9% for the quarter, against a double digit comparable in the second quarter of 25.”
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Figure
Costs related to manufacturing loss absorption and R&D or IT remediation for cyber issues are expected to offset benefits for the company.
Source quote
“There are costs that are coming through from a cyber perspective, both with loss absorption from manufacturing as well as R&D or our IT costs that we have that we that we are planning for as we come through the remediation that will offset that benefit.”
4 more
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Key theme
SYK plans to resume share repurchases this quarter due to elevated cash flow generation and recent valuation compression across the medtech sector.
Source quote
“Additionally, considering our elevated level of cash flow generation, and recent valuation compression across the medtech sector, we plan to resume share repurchases this quarter.”
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Figure
SYK is experiencing a production ramp because plants have been operating consistently since April 1.
Source quote
“All we have to do is make the products, and ship the products, and we can see the production ramp now that our plants have been operating pretty consistently since April 1.”
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Key theme
The company expects significant second-half sales growth because orders in the newly created SmartCare business unit have picked up following a technology stack integration.
Source quote
“The orders were very strong in SmartCare. So we are expecting a really big second half of sales growth so big because the orders have really, really picked up since we have created the business unit, integrated the tech stack, we are getting great feedback from our hospital customers, and I am expecting a very strong second half of the year and future related to SmartCare.”
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Figure
SYK remains committed to its target of 150 basis points over the course of 3 years.
Source quote
“So first of all, we are still committed to what we talked about last year, which is our 150 basis points over the course of 3 years.”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q2 2026. Ring: Q1 2026.
Script and answers carried a similar tone, so the script's message held up under questioning.
Sentences that drove the tone
“Ended the second quarter with approximately $3.5 billion of cash and marketable securities, and year to date cash from operations of $1.8 billion supported by a strong balance sheet and...”
“Trauma and extremities organic sales increased 12.5% with strong double digit sales growth in our Trauma and Upper Extremities businesses, Pangaea continues to be a key driver of our growth...”
“We continue to see long term growth opportunities in our international markets, through strong commercial execution, and the introduction of products that have demonstrated success in The United States in...”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-06-30)
| Metric | Q2 2026period end 2026-06-30 | Q1 2026period end 2026-03-31 | Change | Q2 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 6.59B | 6.02B | +9.5% | 6.02B | +9.4% |
| Gross profit | 4.50B | 3.81B | +18.1% | 3.84B | +17.1% |
| Operating income | 1.66B | 936.0M | +77.2% | 1.11B | +49.1% |
| Net income | 1.28B | 745.0M | +71.3% | 884.0M | +44.3% |
| EPS | 3.30 | 1.93 | +71.0% | 2.29 | +44.1% |
| P/E today 34.7 | 32.6 | 38.0 | −5.4 | 52.4 | −19.8 |
Topics
Most discussed now
- New The equivalent of that is a PEERLESS II study that Stryker justs finished enrolling 1.2 thousand patients.
- Stryker is narrowing its full year guidance, and its businesses are well positioned to deliver another strong year of financial...
- Stryker delivered strong organic sales growth of 9% including high single digit growth from both its med surg and neurotechnology...
- For today's call, I will provide opening comments followed by Nick with market trends and some product updates.
- While Stryker's sales force hiring and integration has made great progress, the supply disruption resulted in a meaningful backorder…
Faded since Q1 2026
- Fading This decline was driven by limited sales growth and lost manufacturing absorption related to the cyber incident as well as...
- Fading What Stryker would say there is it loves its position as market leaders in robotics.
- Fading That's right, you'll see both the capital elements of the Orthopaedic Instruments business flowing through there as well as some...
- Dropped You're going to learn a lot more about the neurosurgical power tools, the craniomaxillofacial products.
Latest announcements
Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.
- Results of operations · SEC 8-K
- Director or officer change; Regulation FD disclosure · SEC 8-K
Spencer Stiles will become CEO on January 1, 2027, with a base salary of $1,320,000 and a bonus target of 150%, following a period where annual net sales grew from $8.7 billion in 2012 to over $26 billion in 2026.
- Results of operations · SEC 8-K
Stryker reported net sales of $6.6 billion, up 9.4% year over year, and reported earnings per share of $3.30, up 44.1% year over year.
- Other events · SEC 8-K
- Director or officer change · SEC 8-K
Ms. Baculik's annualized base salary will increase to $420,000 effective September 1, 2026, while Mr. Berry will serve as an advisor with a base salary of $510,000 until August 15, 2027.
- Shareholder vote results · SEC 8-K · routine
- Results of operations · SEC 8-K
Stryker reported first-quarter 2026 net sales of $6.0 billion, an increase of 2.6% over the previous year, with reported earnings per share of $1.93, up 14.2% year over year.
- Regulation FD disclosure · SEC 8-K
Stryker Corporation filed an 8-K on March 23, 2026, regarding a security incident where Palo Alto Networks' Unit 42 confirmed that all identified unauthorized activities were contained and mitigated.
Catalyst calendar
management-stated targets — from the latest earnings call; plans, not promises.
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by the end of Q3
backorders reach a manageable level
Source quote
“We have addressed the issue and backorders should reach a manageable level by the end of Q3.”
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during Q4
full commercial launch of Pangaea Trauma Plating System in Europe
Source quote
“To be followed by a full commercial launch during Q4.”
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full-year 2026
adjusted other income and expense
Source quote
“We continue to expect our full-year 2026 adjusted other income and expense to be approximately $420 million”
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2026
full year effective tax rate
Source quote
“For 2026, we continue to expect our full year effective tax rate to be in the range of 15% to 16%.”
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this quarter
resume share repurchases
Source quote
“Additionally, considering our elevated level of cash flow generation, and recent valuation compression across the medtech sector, we plan to resume share repurchases this quarter.”