At US$386, Is It Time To Put Stryker Corporation (NYSE:SYK) On Your Watch List?

Let's talk about the popular Stryker Corporation (NYSE:SYK). The company's shares saw a decent share price growth of 19% on the NYSE over the last few months. The recent jump in the share price has meant that the company is trading around its 52-week high. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s take a look at Stryker’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Stryker

Is Stryker Still Cheap?

According to our valuation model, Stryker seems to be fairly priced at around 7.11% above our intrinsic value, which means if you buy Stryker today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $360.08, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, Stryker’s low beta implies that the stock is less volatile than the wider market.

What kind of growth will Stryker generate?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Stryker's earnings over the next few years are expected to increase by 37%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in SYK’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on SYK, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you'd like to know more about Stryker as a business, it's important to be aware of any risks it's facing. At Simply Wall St, we found 2 warning signs for Stryker and we think they deserve your attention.

If you are no longer interested in Stryker, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.