Wait for a dip to buy Stryker stock

We believe there are only a couple of things to fear in SYK stock given its overall Strong operating performance and financial condition. But given its Very High valuation, the stock appears Relatively Expensive. Here is our multi-factor assessment.

But no matter how attractive, investing in a single stock carries high risk. Trefis High Quality Portfolio and is designed to reduce stock-specific risk while giving upside exposure

Let’s get into details of each of the assessed factors but before that, for quick background: With $144 Bil in market cap, Stryker provides surgical equipment, navigation systems, patient care products, and orthopedic implants for joint replacements, trauma, and extremities surgeries through MedSurg and Orthopaedics segments.

[1] Valuation Looks Very High

This table highlights how SYK is valued vs broader market. For more details see: SYK Valuation Ratios

[2] Growth Is Strong

• Stryker has seen its top line grow at an average rate of 10.0% over the last 3 years
• Its revenues have grown 11% from $21 Bil to $23 Bil in the last 12 months
• Also, its quarterly revenues grew 11.9% to $5.9 Bil in the most recent quarter from $5.2 Bil a year ago.

This table highlights how SYK is growing vs broader market. For more details see: SYK Revenue Comparison

[3] Profitability Appears Moderate

• SYK last 12 month operating income was $4.6 Bil representing operating margin of 19.7%
• With cash flow margin of 18.5%, it generated nearly $4.3 Bil in operating cash flow over this period
• For the same period, SYK generated nearly $2.9 Bil in net income, suggesting net margin of about 12.3%

This table highlights how SYK profitability vs broader market. For more details see: SYK Operating Income Comparison

[4] Financial Stability Looks Strong

• SYK Debt was $17 Bil at the end of the most recent quarter, while its current Market Cap is $144 Bil. This implies Debt-to-Equity Ratio of 11.7%
• SYK Cash (including cash equivalents) makes up $2.4 Bil of $46 Bil in total Assets. This yields a Cash-to-Assets Ratio of 5.2%

[4] Downturn Resilience Is Weak

SYK has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• SYK stock fell 32.4% from a high of $280.09 on 8 September 2021 to $189.27 on 18 July 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 2 February 2023
• Since then, the stock increased to a high of $403.53 on 27 July 2025 , and currently trades at $378.95

 
2020 Covid Pandemic

• SYK stock fell 43.8% from a high of $225.10 on 19 February 2020 to $126.50 on 23 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 12 October 2020

 
2008 Global Financial Crisis

• SYK stock fell 59.2% from a high of $76.48 on 26 December 2007 to $31.19 on 9 March 2009 vs. a peak-to-trough decline of 56.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 8 January 2014

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read SYK Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – S&P 500, Russell, and S&P midcap. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.