Medical technology company Stryker (NYSE: SYK) met Wall Street’s revenue expectations in Q2 CY2026, with sales up 9.4% year on year to $6.59 billion. Its non-GAAP profit of $3.69 per share was 5.8% above analysts’ consensus estimates.
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Stryker (SYK) Q2 CY2026 Highlights:
- Revenue: $6.59 billion vs analyst estimates of $6.57 billion (9.4% year-on-year growth, in line)
- Adjusted EPS: $3.69 vs analyst estimates of $3.49 (5.8% beat)
- Management slightly raised its full-year Adjusted EPS guidance to $15.02 at the midpoint
- Operating Margin: 25.2%, up from 18.5% in the same quarter last year
- Free Cash Flow Margin: 16.1%, similar to the same quarter last year
- Organic Revenue rose 9% year on year (miss)
- Market Capitalization: $135 billion
“We made significant progress in our recovery from the cyber incident, delivering strong growth in sales, earnings per share and operating cash flow in the second quarter,” said Kevin A. Lobo, Chair and CEO.
Company Overview
With over 150 million patients impacted annually through its innovative healthcare technologies, Stryker (NYSE: SYK) develops and manufactures advanced medical devices and equipment across orthopedics, surgical tools, neurotechnology, and patient care solutions.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Luckily, Stryker’s sales grew at a decent 9.7% compounded annual growth rate over the last five years. Its growth was slightly above the average healthcare company and shows its offerings resonate with customers.
We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. Stryker’s annualized revenue growth of 9.9% over the last two years aligns with its five-year trend, suggesting its demand was stable. 
We can better understand the company’s sales dynamics by analyzing its organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, Stryker’s organic revenue averaged 9.2% year-on-year growth. Because this number aligns with its two-year revenue growth, we can see the company’s core operations (not acquisitions and divestitures) drove most of its results. 
This quarter, Stryker grew its revenue by 9.4% year on year, and its $6.59 billion of revenue was in line with Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 10.3% over the next 12 months, similar to its two-year rate. This projection is particularly healthy for a company of its scale and suggests the market sees success for its products and services.
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Adjusted Operating Margin
Stryker has been an efficient company over the last five years. It was one of the more profitable businesses in the healthcare sector, boasting an average adjusted operating margin of 24.9%.
Analyzing the trend in its profitability, Stryker’s adjusted operating margin rose by 1.1 percentage points over the last five years, as its sales growth gave it operating leverage. The company’s two-year trajectory shows its performance was mostly driven by its recent improvements. These data points are very encouraging and show momentum is on its side.
This quarter, Stryker generated an adjusted operating margin profit margin of 25.2%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Stryker’s solid 8.8% annual EPS growth over the last five years aligns with its revenue performance. This tells us its incremental sales were profitable.
In Q2, Stryker reported adjusted EPS of $3.69, up from $3.13 in the same quarter last year. This print beat analysts’ estimates by 5.8%. Over the next 12 months, Wall Street expects Stryker’s full-year EPS to grow 15.6% from $13.95 to $16.13.
Key Takeaways from Stryker’s Q2 Results
Revenue was just in line. It was good to see Stryker beat analysts’ EPS expectations this quarter despite in-line revenue. Investors were likely hoping for more, and shares traded down 7.5% to $316.54 immediately after reporting.
Is Stryker an attractive investment opportunity right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
