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Here's Why You Should Hold Stryker Stock in Your Portfolio for Now
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Key Takeaways
SYK delivered 9% organic sales growth in Q2, with strength across MedSurg, Neurotechnology and Orthopaedics.
Mako adoption is expanding, with more than 2.5 million procedures and launches in shoulders and RPS.
Cybersecurity and supply disruptions remain risks, while temporary tariff benefits complicate margin gains.
Stryker (SYK - Free Report) entered 2026 facing an unexpected cyber disruption, yet underlying demand, robotics adoption and international momentum remained strong. While a robust capital pipeline and active acquisition strategy support long-term growth, execution risks tied to recovery efforts, margin pressures and expanding exposure to new markets could shape the company’s performance over the coming quarters.
This Zacks Rank #3 (Hold) company’s shares have lost 21.7% so far this year compared with the industry’s 21.6% decline. The S&P 500 Index has appreciated 13.2% over the same time frame.
Stryker is a global leader in medical technology with a portfolio spanning Orthopaedics, MedSurg and Neurotechnology. The company has a market capitalization of $105.7 billion.
SYK’s bottom line is anticipated to improve 10.6% over the next five years. Its earnings beat estimates in three of the trailing four quarters and missed once, delivering a negative average surprise of 0.73%.
Image Source: Zacks Investment Research
Let’s delve deeper.
Factors Driving Stryker’s Prospects
Broad-Based Organic Sales Growth Signals Resilient Demand: Stryker delivered 9% organic sales growth in the second quarter of 2026, with both MedSurg & Neurotechnology and Orthopaedics reporting high-single-digit growth. MedSurg & Neurotechnology sales increased 9.2%, driven by strong performance in Instruments, Endoscopy and Medical, while Orthopaedics grew 8.6%.
International sales remained solid at 8.9%, supported by markets including Australia, Germany, Canada, India and Brazil. The broad-based nature of this growth indicates resilient demand across multiple procedure categories rather than reliance on a single product franchise, providing Stryker with a strong foundation for its 2026 growth outlook.
Mako Robotics Strengthens Stryker’s Competitive Position: Mako remains a key growth driver for Stryker, with more than 2.5 million procedures completed globally and systems installed across 47 countries. U.S. knee sales rose 6.2%, supported by continued Mako adoption, while Ortho Tech grew 9.2% on strong Mako installations.
The full commercial launch of Mako Shoulder and Mako RPS expands the platform’s addressable procedure base and strengthens Stryker’s presence across knee, hip and shoulder procedures. As robotic-assisted surgery adoption expands, Stryker’s installed Mako base can support recurring demand for implants, instruments and capital equipment, reinforcing its integrated MedTech ecosystem.
Margin Expansion and Cost Discipline Support Earnings Growth: Stryker delivered meaningful operating leverage in the second quarter, with adjusted EPS increasing 17.9% to $3.69. Adjusted gross margin expanded 60 basis points to 66%, while adjusted operating margin increased 170 basis points to 27.4%.
Management attributed the improvement to favorable business mix, cost discipline and lower SG&A as a percentage of sales. These gains are notable as Stryker continues to absorb cybersecurity remediation and manufacturing recovery costs. If revenue momentum continues, incremental sales could increasingly flow through to earnings, supporting management’s full-year adjusted EPS outlook of $14.95-$15.10.
Downside Risks for Stryker
Cybersecurity Disruption Continues to Weigh on Financial Performance: Although Stryker has largely recovered from its cybersecurity incident, its financial impact continues into 2026. The disruption temporarily shut manufacturing facilities, leading to lost production absorption and idle costs. Management also expects continued cybersecurity remediation and stabilization expenses throughout the year.
These costs are contributing to a wider EPS guidance range and could limit earnings conversion despite strong revenue growth. While production has ramped up and recovery is progressing, the incident highlights execution risks across Stryker’s integrated global manufacturing network. Further disruptions or a slower-than-expected normalization could result in additional costs, supply constraints and margin pressure.
Peripheral Vascular Supply Issues Create a Near-Term Growth Headwind: Stryker’s Peripheral Vascular business remains a near-term weakness following a supply disruption at a manufacturing facility supporting the Inari portfolio. The issue created a significant backlog and led to lost sales in the second quarter, offsetting otherwise strong U.S. growth.
Management expects backorders to reach manageable levels by the end of the third quarter, but the disruption underscores execution risks in an important growth market. Management estimated the shortfall could represent roughly 50-75 basis points of organic growth drag. Until production normalizes, Peripheral Vascular is likely to constrain consolidated growth despite favorable long-term market fundamentals.
Tariffs, Input Costs and Macro Uncertainty Could Pressure Margins: Stryker’s second-quarter margin performance benefited from a net tariff benefit, complicating the outlook for sustained margin expansion. Management also cited ongoing pressure from oil and other raw materials, alongside cybersecurity-related expenses and broader macroeconomic uncertainty.
While the tariff benefit supported second-quarter gross margin, it may not recur, creating less favorable comparisons in the future. Strong sales growth is expected to provide earnings leverage, but higher input costs could offset part of that benefit. Investors should therefore distinguish between structural productivity improvements and temporary cost benefits when evaluating the durability of Stryker’s 2026 margin expansion.
SYK has been witnessing a positive estimate revision trend for 2026. In the past 60 days, the Zacks Consensus Estimate for earnings has increased 1 cent to $15 per share.
The consensus mark for third-quarter 2026 revenues is pegged at $6.66 billion, indicating a 10% improvement from the year-ago reported actuals. The bottom-line estimate is pinned at $3.63, implying year-over-year growth of 13.8%.
Globus Medical, currently sporting a Zacks Rank #1 (Strong Buy), reported a second-quarter 2026 adjusted earnings per share (EPS) of $1.34, which surpassed the Zacks Consensus Estimate by 19.6%. Revenues of $789.6 million beat the Zacks Consensus Estimate by 0.4%. You can see the complete list of today’s Zacks #1 Rank stocks here.
GMED has an estimated long-term earnings growth rate of 12.4%. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 27.9%.
Veracyte, currently flaunting a Zacks Rank #1, reported a second-quarter 2026 adjusted EPS of 54 cents, which surpassed the Zacks Consensus Estimate by 25.6%. Revenues of $150.3 million beat the Zacks Consensus Estimate by 4.1%.
VCYT has an estimated earnings growth rate of 8.4% for 2026. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 41.8%.
Abbott, carrying a Zacks Rank #2 (Buy) at present, reported second-quarter 2026 adjusted EPS of $3.69, which beat the Zacks Consensus Estimate by 6.7%. Revenues of $6.59 billion surpassed the Zacks Consensus Estimate by 0.5%.
ABT has an estimated long-term earnings growth rate of 9.8%. ABT’s earnings surpassed estimates in two of the trailing four quarters and met twice, the average surprise being 0.81%.
View the Zacks #1 Rank List
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Here's Why You Should Hold Stryker Stock in Your Portfolio for Now
Key Takeaways
Stryker (SYK - Free Report) entered 2026 facing an unexpected cyber disruption, yet underlying demand, robotics adoption and international momentum remained strong. While a robust capital pipeline and active acquisition strategy support long-term growth, execution risks tied to recovery efforts, margin pressures and expanding exposure to new markets could shape the company’s performance over the coming quarters.
This Zacks Rank #3 (Hold) company’s shares have lost 21.7% so far this year compared with the industry’s 21.6% decline. The S&P 500 Index has appreciated 13.2% over the same time frame.
Stryker is a global leader in medical technology with a portfolio spanning Orthopaedics, MedSurg and Neurotechnology. The company has a market capitalization of $105.7 billion.
SYK’s bottom line is anticipated to improve 10.6% over the next five years. Its earnings beat estimates in three of the trailing four quarters and missed once, delivering a negative average surprise of 0.73%.
Image Source: Zacks Investment Research
Let’s delve deeper.
Factors Driving Stryker’s Prospects
Broad-Based Organic Sales Growth Signals Resilient Demand: Stryker delivered 9% organic sales growth in the second quarter of 2026, with both MedSurg & Neurotechnology and Orthopaedics reporting high-single-digit growth. MedSurg & Neurotechnology sales increased 9.2%, driven by strong performance in Instruments, Endoscopy and Medical, while Orthopaedics grew 8.6%.
International sales remained solid at 8.9%, supported by markets including Australia, Germany, Canada, India and Brazil. The broad-based nature of this growth indicates resilient demand across multiple procedure categories rather than reliance on a single product franchise, providing Stryker with a strong foundation for its 2026 growth outlook.
Mako Robotics Strengthens Stryker’s Competitive Position: Mako remains a key growth driver for Stryker, with more than 2.5 million procedures completed globally and systems installed across 47 countries. U.S. knee sales rose 6.2%, supported by continued Mako adoption, while Ortho Tech grew 9.2% on strong Mako installations.
The full commercial launch of Mako Shoulder and Mako RPS expands the platform’s addressable procedure base and strengthens Stryker’s presence across knee, hip and shoulder procedures. As robotic-assisted surgery adoption expands, Stryker’s installed Mako base can support recurring demand for implants, instruments and capital equipment, reinforcing its integrated MedTech ecosystem.
Margin Expansion and Cost Discipline Support Earnings Growth: Stryker delivered meaningful operating leverage in the second quarter, with adjusted EPS increasing 17.9% to $3.69. Adjusted gross margin expanded 60 basis points to 66%, while adjusted operating margin increased 170 basis points to 27.4%.
Management attributed the improvement to favorable business mix, cost discipline and lower SG&A as a percentage of sales. These gains are notable as Stryker continues to absorb cybersecurity remediation and manufacturing recovery costs. If revenue momentum continues, incremental sales could increasingly flow through to earnings, supporting management’s full-year adjusted EPS outlook of $14.95-$15.10.
Downside Risks for Stryker
Cybersecurity Disruption Continues to Weigh on Financial Performance: Although Stryker has largely recovered from its cybersecurity incident, its financial impact continues into 2026. The disruption temporarily shut manufacturing facilities, leading to lost production absorption and idle costs. Management also expects continued cybersecurity remediation and stabilization expenses throughout the year.
These costs are contributing to a wider EPS guidance range and could limit earnings conversion despite strong revenue growth. While production has ramped up and recovery is progressing, the incident highlights execution risks across Stryker’s integrated global manufacturing network. Further disruptions or a slower-than-expected normalization could result in additional costs, supply constraints and margin pressure.
Peripheral Vascular Supply Issues Create a Near-Term Growth Headwind: Stryker’s Peripheral Vascular business remains a near-term weakness following a supply disruption at a manufacturing facility supporting the Inari portfolio. The issue created a significant backlog and led to lost sales in the second quarter, offsetting otherwise strong U.S. growth.
Management expects backorders to reach manageable levels by the end of the third quarter, but the disruption underscores execution risks in an important growth market. Management estimated the shortfall could represent roughly 50-75 basis points of organic growth drag. Until production normalizes, Peripheral Vascular is likely to constrain consolidated growth despite favorable long-term market fundamentals.
Tariffs, Input Costs and Macro Uncertainty Could Pressure Margins: Stryker’s second-quarter margin performance benefited from a net tariff benefit, complicating the outlook for sustained margin expansion. Management also cited ongoing pressure from oil and other raw materials, alongside cybersecurity-related expenses and broader macroeconomic uncertainty.
While the tariff benefit supported second-quarter gross margin, it may not recur, creating less favorable comparisons in the future. Strong sales growth is expected to provide earnings leverage, but higher input costs could offset part of that benefit. Investors should therefore distinguish between structural productivity improvements and temporary cost benefits when evaluating the durability of Stryker’s 2026 margin expansion.
Stryker Corporation Price
Stryker Corporation price | Stryker Corporation Quote
Estimate Trend
SYK has been witnessing a positive estimate revision trend for 2026. In the past 60 days, the Zacks Consensus Estimate for earnings has increased 1 cent to $15 per share.
The consensus mark for third-quarter 2026 revenues is pegged at $6.66 billion, indicating a 10% improvement from the year-ago reported actuals. The bottom-line estimate is pinned at $3.63, implying year-over-year growth of 13.8%.
Stocks to Consider
Some better-ranked stocks from the broader medical space are Globus Medical (GMED - Free Report) , Veracyte (VCYT - Free Report) and Abbott Laboratories (ABT - Free Report) .
Globus Medical, currently sporting a Zacks Rank #1 (Strong Buy), reported a second-quarter 2026 adjusted earnings per share (EPS) of $1.34, which surpassed the Zacks Consensus Estimate by 19.6%. Revenues of $789.6 million beat the Zacks Consensus Estimate by 0.4%. You can see the complete list of today’s Zacks #1 Rank stocks here.
GMED has an estimated long-term earnings growth rate of 12.4%. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 27.9%.
Veracyte, currently flaunting a Zacks Rank #1, reported a second-quarter 2026 adjusted EPS of 54 cents, which surpassed the Zacks Consensus Estimate by 25.6%. Revenues of $150.3 million beat the Zacks Consensus Estimate by 4.1%.
VCYT has an estimated earnings growth rate of 8.4% for 2026. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 41.8%.
Abbott, carrying a Zacks Rank #2 (Buy) at present, reported second-quarter 2026 adjusted EPS of $3.69, which beat the Zacks Consensus Estimate by 6.7%. Revenues of $6.59 billion surpassed the Zacks Consensus Estimate by 0.5%.
ABT has an estimated long-term earnings growth rate of 9.8%. ABT’s earnings surpassed estimates in two of the trailing four quarters and met twice, the average surprise being 0.81%.