Medical technology company Stryker (NYSE: SYK) missed Wall Street’s revenue expectations in Q1 CY2026 as sales rose 2.6% year on year to $6.02 billion. Its non-GAAP profit of $2.60 per share was 12.9% below analysts’ consensus estimates.
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Stryker (SYK) Q1 CY2026 Highlights:
- Revenue: $6.02 billion vs analyst estimates of $6.34 billion (2.6% year-on-year growth, 5% miss)
- Adjusted EPS: $2.60 vs analyst expectations of $2.98 (12.9% miss)
- Adjusted EBITDA: $1.06 billion vs analyst estimates of $1.57 billion (17.5% margin, 32.8% miss)
- Management reiterated its full-year Adjusted EPS guidance of $15 at the midpoint
- Operating Margin: 15.5%, up from 14.3% in the same quarter last year
- Free Cash Flow Margin: 6.9%, up from 2.2% in the same quarter last year
- Organic Revenue rose 2.4% year on year (miss)
- Market Capitalization: $120.7 billion
“I am pleased with our team’s ability to recover quickly from the cyber incident and continue delivering for our customers and their patients,” 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
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Thankfully, Stryker’s 11.4% annualized revenue growth over the last five years was decent. Its growth was slightly above the average healthcare company and shows its offerings resonate with customers.
Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Stryker’s annualized revenue growth of 9.8% over the last two years is below its five-year trend, but we still think the results were respectable. 
Stryker also reports 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’s revenue grew by 2.6% year on year to $6.02 billion, falling short of 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 noteworthy for a company of its scale and suggests the market is forecasting success for its products and services.
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Adjusted Operating Margin
Adjusted operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies because it excludes non-recurring expenses, interest on debt, and taxes.
Stryker’s adjusted operating margin has generally stayed the same over the last 12 months, averaging 24.6% over the last five years. This profitability was top-notch for a healthcare business, showing it’s an well-run company with an efficient cost structure.
Analyzing the trend in its profitability, Stryker’s adjusted operating margin might fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.
In Q1, Stryker generated an adjusted operating margin profit margin of 15.5%, down 7.4 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.
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 spectacular 12.2% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.
In Q1, Stryker reported adjusted EPS of $2.60, down from $2.84 in the same quarter last year. This print missed analysts’ estimates, but we care more about long-term adjusted EPS growth than short-term movements. Over the next 12 months, Wall Street expects Stryker’s full-year EPS of $13.39 to grow 15.9%.
Key Takeaways from Stryker’s Q1 Results
We struggled to find many positives in these results. Its revenue missed and its EPS fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded down 1.9% to $309.46 immediately after reporting.
Stryker may have had a tough quarter, but does that actually create an opportunity to invest right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
