STRYKER CORP (SYK) Stock Analysis

Analysis from 10-Q filed 2025-10-31. Data as of Q4 2025.

Overall Grade: F (Concerning)

STRYKER CORP faces challenges in financial performance that warrant careful analysis.

Metric	Value	Context
ROIC	10.1%	Near cost of capital
FCF Margin	17.1%	Strong cash generation

Investment Thesis: Healthy free cash flow margin of 17.1% provides financial flexibility for growth and shareholder returns.

Explore STRYKER CORP: Earnings History | Filing Intelligence | ROIC Analysis

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Profitability: STRYKER CORP earns 10.1% ROIC, Top 50% in Healthcare

STRYKER CORP's trailing-twelve-month ROIC of 10.1% ranks Top 50% in Healthcare companies (sector median: -3.9%), driven by NOPAT margin of 14.0% combined with asset turnover of 0.5x. Source: 10-Q filed 2025-10-31. Gross margin of 64.0% with operating margin at 19.5% reflects strong pricing power.

Metric	SYK	Rating	Context
Return on Invested Capital (ROIC)	10.1%	Adequate	Above sector median of -3.9%
Gross Margin	64.0%	Excellent	Strong pricing power
Operating Margin	19.5%	Good	Efficient operations

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Cash Flow: STRYKER CORP generates $4.3B FCF at 17.1% margin, positive NaN/8 quarters

STRYKER CORP generated $4.3B in free cash flow (TTM), a 17.1% FCF margin, a margin that ranks Top 5% in Healthcare. Operating cash flow exceeds net income by 1.6x, indicating high earnings quality. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-10-31.

Metric	SYK	Rating	Context
Free Cash Flow Margin	17.1%	Good	Excellent cash conversion
Free Cash Flow (TTM)	$4.3B	Good	Positive cash generation
OCF/Net Income	1.6x	Excellent	High earnings quality
FCF Consistency (8Q)	N/A	Warning	Variable cash flow

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Balance Sheet Analysis for STRYKER CORP

Total debt of $15.9B offset by $4.1B in cash. Source: 10-Q filed 2025-10-31.

Metric	SYK	Rating	Context
Net Cash Position	$-11.8B	Warning	Net debt position

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Valuation: STRYKER CORP trades at 41.4x earnings

STRYKER CORP trades at a P/E of 41.4x. Free cash flow yield of 3.2% reflects market expectations for growth.

Metric	SYK	Rating	Context
P/E Ratio	41.4x	Adequate	Premium valuation
EV/Sales	5.9x	Adequate	Growth premium priced in
FCF Yield	3.2%	Adequate	Lower cash yield
Dividend Yield	1.0%	Adequate	Growth focus over income

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Capital Allocation: STRYKER CORP returns 1.0% shareholder yield

STRYKER CORP's total shareholder yield is 1.0% (dividends 1.0% + buybacks). Source: 10-Q filed 2025-10-31.

Metric	SYK	Rating	Context
Total Shareholder Yield	1.0%	Adequate	Dividend + buyback yield combined
Total Capital Returned (TTM)	$1.3B	Good	Dividends + buybacks returned to shareholders

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Sector Rankings

Metric	Value	Percentile	vs Median
Return on Invested Capital (ROIC)	10.1%	Top 50%	-
Free Cash Flow Margin	17.1%	Top 5%	-
Gross Margin	64.0%	Top 50%	1.0x at
Operating Margin	19.5%	Top 25%	10.1x above
P/E Ratio	41.4x	N/A	-

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Financial Scorecard

Metric	SYK	Rating	Sector Context
Return on Invested Capital (ROIC)	10.1%	Adequate	Top 50% of sector (median: -3.9%)
Free Cash Flow Margin	17.1%	Good	Top 5% of sector (median: 0.0%)
Gross Margin	64.0%	Excellent	Top 50% of sector (median: 64.0%)
P/E Ratio (Price-to-Earnings)	41.4x	Adequate	High expectations priced in
Free Cash Flow Yield	3.2%	Adequate	Moderate yield

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Frequently Asked Questions

Q: What is STRYKER CORP's Return on Invested Capital (ROIC)?

STRYKER CORP (SYK) has a trailing twelve-month Return on Invested Capital (ROIC) of 10.1%. This compares above the sector median of -3.9%. An ROIC near 8-12% is approximately the cost of capital for most companies.

Q: What is STRYKER CORP's Free Cash Flow Margin?

STRYKER CORP (SYK) has a free cash flow margin of 17.1%, generating $4.3 billion in free cash flow over the trailing twelve months. A FCF margin between 10-20% represents healthy cash generation for most industries.

Q: Is STRYKER CORP stock overvalued or undervalued?

STRYKER CORP (SYK) trades at a P/E ratio of 41.4x, which is above the sector median of N/A. The EV/Sales multiple is 5.9x. Free cash flow yield is 3.2%, which is in line with market averages.

Q: Does STRYKER CORP pay a dividend?

STRYKER CORP (SYK) currently pays a dividend yield of 1.0%. Including share buybacks, the total shareholder yield is 1.0%. The relatively low yield suggests the company prioritizes growth reinvestment over income distribution.

Q: What is STRYKER CORP's revenue and earnings growth?

STRYKER CORP (SYK) grew revenue by 11.2% year-over-year. Earnings per share increased by 8.2% compared to the prior year. Solid growth above 10% suggests healthy business momentum.

Q: How does STRYKER CORP compare to competitors in Healthcare?

Compared to other companies in Healthcare, STRYKER CORP (SYK) shows: ROIC of 10.1% is above the sector median of -3.9% (Top 26%). FCF margin of 17.1% exceeds the sector median of 0.0% (Top 0% of sector). Gross margin at 64.0% is 0 percentage points lower than sector peers. These rankings are based on MetricDuck's analysis of all Healthcare companies with available SEC filings.

Q: What warning signs should I watch for with STRYKER CORP?

STRYKER CORP (SYK) shows no major financial warning signs based on current metrics. However, investors should always monitor: 1) Margin compression trends, 2) Cash flow consistency, 3) Debt levels relative to cash generation, and 4) Changes in competitive positioning.

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Data Source: Data sourced from 10-Q filed 2025-10-31. TTM metrics as of Q4 2025.

Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.

Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.

This analysis is for informational purposes only and does not constitute investment advice.