Stryker Corp (SYK, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $335.48, Stryker Corp has witnessed a daily gain of 6.62%, marked against a three-month change of 24.48%. A thorough analysis, underlined by the GF Score, suggests that Stryker Corp is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 6/10
- Profitability rank: 9/10
- Growth rank: 10/10
- GF Value rank: 5/10
- Momentum rank: 10/10
Each one of these components is ranked and the ranks also have positive correlation with the long-term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With high ranks in profitability, growth, and momentum, and a moderate financial strength rank, GuruFocus assigned Stryker Corp the GF Score of 94 out of 100, which signals the highest outperformance potential.
Understanding Stryker Corp's Business
Stryker Corp designs, manufactures, and markets an array of medical equipment, instruments, consumable supplies, and implantable devices. The product portfolio includes hip and knee replacements, endoscopy systems, operating room equipment, embolic coils, hospital beds and gurneys, and spinal devices. Stryker remains one of the three largest competitors in reconstructive orthopedic implants and holds the leadership position in operating room equipment. Just over one fourth of Stryker's total revenue currently comes from outside the United States. With a market cap of $127.46 billion and sales of $20.50 billion, coupled with an operating margin of 19.06%, Stryker Corp's financial metrics are indicative of its industry leadership and operational efficiency.
Financial Strength Breakdown
According to the Financial Strength rating, Stryker Corp's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. With a favorable Debt-to-Revenue ratio of 0.53, Stryker Corp's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows Stryker Corp's impressive standing among its peers in generating profit. The Piotroski F-Score confirms Stryker Corp's solid financial situation based on Joseph Piotroski's nine-point scale, which measures a company's profitability, funding and operating efficiency. Stryker Corp's strong Predictability Rank of 4.5 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, Stryker Corp demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 12.3%, which outperforms worse than 50.07% of 719 companies in the Medical Devices & Instruments industry. Moreover, Stryker Corp has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 17, and the rate over the past five years is 7.2. This trend accentuates the company's continued capability to drive growth.
Conclusion: Stryker Corp's Position for Outperformance
Considering Stryker Corp's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. The company's strategic management, consistent operational performance, and commitment to growth are key drivers that make it an attractive option for value investors. As the medical technology industry continues to evolve, Stryker Corp's innovative approach and market leadership set the stage for continued success.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
