SYK Financial Analysis

Analysis Date: 1/29/2025

Business Model

Stryker generates revenue through two main segments: MedSurg and Neurotechnology, and Orthopaedics

Revenue Sources

• MedSurg and Neurotechnology (59.8% of revenue): Instruments, Endoscopy, Medical, Neurovascular, and Neuro Cranial products
• Orthopaedics (40.2% of revenue): Knees, Hips, Trauma and Extremities, Spinal Implants, and Other products

Revenue Distribution by Channel

• United States: $16,943M (75% of total revenue)
• International: $5,652M (25% of total revenue)

Income Statement Analysis

• Revenue growth of 10.7% driven by strong organic growth of 10.2%
• Gross margin improved to 64.9% from 63.7% year-over-year
• Operating income significantly impacted by $818M in goodwill and other impairment charges

Balance Sheet Analysis

• Strong cash position with $3.65B in cash and equivalents
• Total assets increased 7.7% to $43.0B

Cash Flow Analysis

• Strong operating cash flow of $4.2B, up 14.3% year-over-year

Capital Allocation

Capital allocation focused on M&A (pending Inari acquisition), dividends ($1.2B paid in 2024), and strategic investments in R&D and manufacturing capacity

Management Commentary

Delivered double-digit organic sales growth while expanding adjusted operating margins

Active in M&A to enhance position in high-growth end markets

Well positioned for sustained success in 2025 and beyond

Overall Sentiment: Confident and optimistic about future growth prospects despite near-term challenges

Recommendation

Rating: Buy

Reason for Rating: Strong organic growth, margin expansion, and strategic M&A support positive outlook

Disclaimer: This analysis is based on company filings and public information. It is for informational purposes only and not financial advice. Past performance does not guarantee future results.

Generated on: 1/29/2025, 8:00:55 AM