About a month has gone by since the last earnings report for Stryker Corporation (SYK - Free Report) . Shares have added about 4.7% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Stryker Earnings and Revenues Beat Estimates in Q3
Maintaining its streak of positive earnings surprises, Kalamazoo, MI-based medical technology company Stryker reported adjusted earnings of $1.52 per share in the third quarter of 2017, which comfortably beat the Zacks Consensus Estimate by 2 cents. Earnings improved from $1.39 per share in the year-ago quarter.
Meanwhile, over the trailing four quarters, the company posted earnings beats, the average being 1.86%. Currently, Stryker carries a Zacks Rank #3 (Hold).
The upside in earnings was primarily driven by a rise in revenues to $3.01 billion, which beat the Zacks Consensus Estimate of $2.97 billion. At constant currency (cc), net sales improved 5.8% from the year-ago quarter.
Segment Details
Orthopaedics net sales of $1.1 billion increased 5.1% year over year in the reported quarter. Excluding the 0.3% impact of acquisitions, net sales in the quarter increased 4.5% in cc, including 6.5% from increased unit volume. This was partially offset due to lower prices.
MedSurg net sales of $1.3 billion increased 6.7% in the reported quarter. Excluding the 0.6% impact of acquisitions, net sales in the quarter increased 5.6% in cc, including 5.6% increased unit volume.
Neurotechnology and Spine net sales of $0.5 billion increased 6.9% in the reported quarter. Net sales in the quarter increased 8.1% from increased unit volume. This was partially offset due to lower prices.
Guidance
For the fourth quarter of 2017, Stryker expects adjusted earnings in the range of $1.92–$1.97 per share. For the full year, the company expects adjusted earnings in the band of $6.45 to $6.50. Stryker expects organic sales growth of 6.5% to 7.0% for full-year 2017.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to two lower.
VGM Scores
At this time, Stryker's stock has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is solely suitable for momentum investors.
Outlook
While estimates have been broadly trending downward for the stock, the magnitude of these revisions has been net zero. Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.
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About a month has gone by since the last earnings report for Stryker Corporation (SYK - Free Report) . Shares have added about 4.7% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Stryker Earnings and Revenues Beat Estimates in Q3
Maintaining its streak of positive earnings surprises, Kalamazoo, MI-based medical technology company Stryker reported adjusted earnings of $1.52 per share in the third quarter of 2017, which comfortably beat the Zacks Consensus Estimate by 2 cents. Earnings improved from $1.39 per share in the year-ago quarter.
Meanwhile, over the trailing four quarters, the company posted earnings beats, the average being 1.86%. Currently, Stryker carries a Zacks Rank #3 (Hold).
The upside in earnings was primarily driven by a rise in revenues to $3.01 billion, which beat the Zacks Consensus Estimate of $2.97 billion. At constant currency (cc), net sales improved 5.8% from the year-ago quarter.
Segment Details
Orthopaedics net sales of $1.1 billion increased 5.1% year over year in the reported quarter. Excluding the 0.3% impact of acquisitions, net sales in the quarter increased 4.5% in cc, including 6.5% from increased unit volume. This was partially offset due to lower prices.
MedSurg net sales of $1.3 billion increased 6.7% in the reported quarter. Excluding the 0.6% impact of acquisitions, net sales in the quarter increased 5.6% in cc, including 5.6% increased unit volume.
Neurotechnology and Spine net sales of $0.5 billion increased 6.9% in the reported quarter. Net sales in the quarter increased 8.1% from increased unit volume. This was partially offset due to lower prices.
Guidance
For the fourth quarter of 2017, Stryker expects adjusted earnings in the range of $1.92–$1.97 per share. For the full year, the company expects adjusted earnings in the band of $6.45 to $6.50. Stryker expects organic sales growth of 6.5% to 7.0% for full-year 2017.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to two lower.
VGM Scores
At this time, Stryker's stock has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is solely suitable for momentum investors.
Outlook
While estimates have been broadly trending downward for the stock, the magnitude of these revisions has been net zero. Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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