A Look at Stryker’s Consistently Growing Revenue Profile


Aug. 24 2016, Published 10:50 a.m. ET

2Q16 performance

Stryker (SYK) is the second largest orthopedics company in the US medical device industry. It follows DePuy Synthes Companies, Johnson & Johnson’s (JNJ) orthopedics division.

SYK registered organic revenue growth of ~6.6% in 2Q16. This growth was mainly driven by the company’s MedSurg and Neurotechnology business, while its Orthopedics business reported stable, consistent performance.

Stryker’s adjusted EPS (earnings per share) came in at about $1.39, representing a rise of ~15.8% on a YoY (year-over-year) basis. Sales growth and a number of strategic acquisitions were the major factors driving Stryker’s growth.

Stryker has witnessed consistently rising revenues for the last several years. The above graph shows the company’s sales growth over the last few quarters.

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Zimmer Biomet (ZBH) and Becton, Dickinson and Company (BDX) are some of Stryker’s major competitors, reporting revenues of ~$1.9 billion and ~$3.2 billion, respectively, in the quarter that ended on June 30, 2016. Investors can gain exposure to Stryker by investing in the iShares Russell 1000 Growth ETF (IWF), which invests ~0.36% of its total holdings in Stryker.

Key revenue drivers

Innovation, strategic acquisitions, and a strong sales force have largely driven Stryker’s revenue growth in recent years. Also, the company’s cost transformation initiatives and restructuring efforts are yielding results and have resulted in better sales and profitability.

Leveraging selling, general, and administrative expense reductions through information technology systems optimization, efficient management of product lifecycles, and other related expenses is expected to improve the company’s growth.

Moreover, the company’s diversified revenue base has helped it to deliver one of the highest growths in the medical device industry. Stryker continues to witness high growth in its US business while its international business presents some potential high growth opportunities.


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