Stryker (SYK): Assessing Valuation After Strong Q2 Results and Upgraded Guidance Driven by Mako Platform Momentum

Stryker (SYK) just turned heads with its second-quarter 2025 results. The company delivered strong earnings, thanks to standout growth in its orthopaedics, MedSurg, and Neurotechnology businesses. Management also raised its full-year organic sales and adjusted EPS guidance. Much of this lift is tied to bigger contributions from the company’s Mako robotic platform, as well as synergies flowing from recent acquisitions. For those watching healthcare stocks, moves like this raise the question: is this the next leg up, or are there still risks lurking beneath the surface?

The market has definitely taken notice. Stryker’s stock price climbed around 10% year-to-date and is up 12% over the past year, surpassing many of its peers. The recent earnings beat and raised guidance follow last year’s push into innovation-led growth and robotics, suggesting that momentum is building rather than fading. Still, the company operates in a challenging environment, facing competitive pressure and economic headwinds that could limit further upside.

So, is this latest rally a signal that Stryker is trading below its true worth, or is the market already accounting for most of its future growth potential?

Most Popular Narrative: 8.8% Undervalued

According to community narrative, Stryker is seen as undervalued by 8.8%, with the fair value based on projected growth in revenues, margins, and market expansion.

A robust innovation pipeline, particularly in robotic-assisted surgery (Mako platform) and next-generation devices, is driving greater market share, higher average selling prices, and service revenues. This is expected to accelerate both revenue and margin expansion over time.

Are bold revenue forecasts and ambitious margin targets enough to justify this premium? This narrative highlights rising industry demand and disruptive new technology as the key drivers of Stryker’s future value. Explore the financial projections and the underlying key assumptions that may set the standard for years to come.

Result: Fair Value of $432.27 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent regulatory delays and ongoing supply chain disruptions could undermine growth expectations. These factors may challenge the bullish outlook for Stryker's next chapter.

Find out about the key risks to this Stryker narrative.

Another View: What Do Earnings Multiples Say?

Looking from a different perspective, the latest numbers suggest Stryker may appear expensive compared to other US medical equipment stocks when evaluated solely on its earnings multiple. Is it possible the market is overestimating growth in this case?

See what the numbers say about this price — find out in our valuation breakdown.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Stryker for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Stryker Narrative

If you see things differently or want to come to your own conclusions, dive into the data and build your own narrative in just a few minutes, and do it your way.

A great starting point for your Stryker research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision.

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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.

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