What Does Stryker’s Valuation Trend Indicate?



Valuation metrics

Stryker’s (SYK) share price has been on an uptrend for the past 52 weeks. From its level of $138.36 on August 23, 2017, it rose steadily to $168.9 on January 26, 2018. Amid the broader market turmoil, Stryker stock touched a 2018 low of $148.01 on February 8, after which it rose to its current level of $169 in August.

Stryker’s EV (enterprise value) is $68.85 billion, and its EV-to-revenue ratio is 5.28. The stock is trading at a forward PE multiple of 21.35x. Its price-to-sales ratio is 4.86, and its price-to-book ratio is 6.70.

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Its current ratio, a metric of how effectively a company can meet its short-term obligations, stands at 1.80. In comparison, the current ratios of its peers Globus Medical (GMED), Johnson & Johnson (JNJ), Medtronic (MDT), and Zimmer Biomet Holdings (ZBH) stand at 7.90, 1.70, 2.30, and 2.40, respectively, indicating that Stryker’s peers are better positioned to satisfy their short-term obligations than it is.

Stryker’s long-term debt-to-equity ratio stands at 0.63. In comparison, the long-term debt-to-equity ratios of its peers Johnson & Johnson, Medtronic, and Zimmer Biomet Holdings stand at 0.47, 0.47, and 0.78, respectively.

Return ratios

Stryker’s return on assets stands at 11.5%. Its return on investment stands at 12.10%, and its return on equity stands at 11.10%. In comparison, the returns on assets of its peers Globus Medical, Medtronic, and Zimmer Biomet Holdings are 12.10%, 3.30%, and 6.40%, respectively.


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