What Would A Short Seller Say About Stryker?

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Investors holding Stryker (SYK) have endured a difficult year. Over the past 12 months, the stock lost 20.2%, dividends included, while the S&P 500 returned 15.0%. A short seller betting that the stock will keep falling would want to know whether Stryker’s slower sales growth comes from hospitals or from inside the company.

Management has addressed the hospital side of the business. During its July 30, 2026 call, the company noted talk of softer surgical volumes but said it had seen no meaningful change in volume trends. Owners can take comfort in that detail. If hospitals are as steady as management says, is Stryker keeping pace with its peers?

Stryker Grew More Slowly Than Most Of Its Peers

Not exactly. Over each company’s own latest four quarters, Stryker’s revenue grew 8.5%, and four of the five peers grew faster. Boston Scientific grew 13.5%, Intuitive Surgical 20.5%, Medtronic 9.8% and Zimmer Biomet 8.6%. Johnson & Johnson was the only peer that grew more slowly, at 7.8%.

A short seller would read those figures as support for management’s view of hospitals, and as a sign that Stryker’s slowdown belongs to the company alone. The slowdown is also recent. Stryker’s revenue grew 11.4% in the four quarters to June 2025, and growth over the latest four quarters, 8.5%, is back at the pace recorded during the four quarters to June 2022.

Management Pointed To Problems Inside Stryker’s Own Plants

Management used the same call to detail what went wrong internally. A cybersecurity incident shut down manufacturing for a period, and management said first-quarter earnings fell well short of expectations because of it. Separately, supply disruptions in the peripheral vascular business led to a meaningful backorder and lost sales in the second quarter.

Put simply, the trouble was making and shipping products, not finding buyers. Management said that Stryker ramped overall production to meet ongoing demand. The company named the conflict in Iran as one outside factor, noting it had what it called a modest impact on growth. Both plant problems sit inside Stryker, which is the short seller’s point, and both leave demand intact, which is management’s.

Stryker’s Profit Dipped Hard In The First Quarter

For an owner, the strain showed most in the first quarter of fiscal 2026. Revenue grew just 2.6% from a year earlier. Stryker kept 15.5 cents of operating profit from every dollar of sales, compared with 25.3 cents in the prior quarter.

Profit recovered in the second quarter of fiscal 2026, when the operating margin reached 25.2%, up from 19.4% in the same quarter of fiscal 2025. Yet management said that the quarter’s earnings beat came partly from tariff refunds, and that cyber costs still coming through will offset that benefit.

What Stryker’s Owners Have Going For Them

Owners have real facts on their side too. At the end of June, Stryker’s shares were priced at 32.4 times earnings, a multiple they had been below at only 11 of the past 40 quarter ends. At the October 27, 2026 close, the multiple was 31.0 times. The company’s larger business, MedSurg and Neurotechnology, grew sales 15.7% in fiscal 2025, and management reported its best ever second quarter for Mako installations. Management also narrowed its 2026 organic sales growth guidance to a range of 8.3% to 9.3%, raising the bottom from 8% and lowering the top, so the middle of the range stayed at 8.8%.

So what would a short seller say? That management’s read on hospitals holds up, and that Stryker’s slower growth came from inside the company. The vascular supply problem management called addressed in July was still not fixed in September: the stock fell 8.8% on September 8, 2026, after the CFO said so, and several law firms then opened investigations. Stryker’s revenue growth for the third quarter, in the report expected on October 29, 2026, is the number to watch. It is also the first report since Stryker said on October 6 that Spencer Stiles, now its President and Chief Operating Officer, will succeed Kevin Lobo as CEO on January 1, 2027.

Does This Mean You Should Act On SYK?

Our purpose is to inform you with unique data so you make the right investment decisions. That said, betting on a single stock is always risky, no matter which direction you choose.

There is a smarter approach. Since its inception, the Trefis High Quality (HQ) Portfolio has returned 105%, beating the benchmark that combines the three major indices – the S&P 500, S&P Mid-cap, and Russell 2000. And it did so without taking the concentrated risk that comes with do-it-yourself stock picking. If that is how you want to invest, the HQ Portfolio is the place to start.

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