SYK's Q4 Results Likely to Reflect Procedure Growth and Capital Demand

Stryker Corporation SYK is scheduled to release fourth-quarter 2025 results on Jan. 29, after market close. In the last reported quarter, the company delivered an earnings surprise of 1.59%.

Q4 Estimates

The Zacks Consensus Estimate for earnings is pegged at $4.39 per share, indicating an increase of 9.5% year over year.

The consensus mark for revenues is pinned at $7.13 billion, implying growth of 10.8% from the prior-year reported figure.

Our model estimates for total sales and adjusted earnings per share are pegged at $7.11 billion and $4.35, respectively.

Factors to Note

Stryker is expected to have delivered another solid performance during the fourth quarter, supported by sustained procedural strength, robust capital demand and continued traction from recent product launches, even as tariff-related cost pressures intensified. The top-line growth was likely due to broad-based demand across Orthopedics and MedSurg and Neurotechnology, alongside improving execution at the recently acquired Inari business.

Organic revenue growth might have been driven by healthy procedure volumes, which management characterized as stable and resilient across geographies. Hospital balance sheets remain strong, supporting capital spending, with Stryker exiting the third quarter with an elevated backlog and strong order books.

This dynamic should have benefited both large capital systems, such as Mako and ProCuity, as well as procedure-linked smaller capital during the soon-to-be-reported quarter. Pricing also appears to have remained a modest tailwind, reflecting disciplined contracting and favorable mix, partially offset by the weaker price improvement following years of rise for Orthopedics.

Meanwhile, margin expansion efforts likely continued to bear fruit through favorable mix, manufacturing efficiencies and SG&A discipline. However, tariff headwinds, which management noted to have higher impact in the second half of 2025, likely constrained incremental margin upside. Higher interest expense from recent debt issuance probably remained a drag on earnings growth.

Our model estimates for adjusted gross margin and adjusted operating margin are 65.6% and 30%, respectively, reflecting 30 and 80 basis point expansion.

Orthopaedics

Orthopedics is expected to have been a key growth engine. Knee and hip businesses likely continued to post high-single-digit organic growth, supported by market-leading robotic-assisted surgery adoption and record Mako installations. Utilization trends should have remained favorable, and the ongoing expansion of Mako capabilities into more complex hip cases might have supported procedure growth. Trauma and Extremities likely sustained double-digit growth, driven by continued share gains in shoulders and strong adoption of the Pangea plating portfolio.

The “Other Ortho” category, which benefited from Mako deal mix and navigation technology during the third quarter, may have normalized sequentially but remained a meaningful contributor given the robust capital environment. International Orthopedics growth is likely to have been aided by emerging markets, though modestly tempered by mix and the wind-down of certain spine tenders.

Our estimate for the Orthopaedics and Spine segment sales is pegged at $2.65 billion.

MedSurg and Neurotechnology

The segment likely sustained its strong third-quarter momentum, supported by broad-based growth. Instruments and Endoscopy probably benefited from strong demand for Surgical Technologies and Sports Medicine, while timing-related softness in the Communications business might have persisted due to delayed infrastructure installations. The Medical segment is likely to have reflected sequential improvement, with management pointing to a strong start to the quarter and an expected rebound as supply-chain disruptions in emergency care gradually eased. Products, such as ProCuity beds, Vocera and the early international rollout of LIFEPAK 35 are likely to have been important contributors.

The Vascular and Neuro Cranial franchises are also positioned for continued strength, supported by recent product launches such as Surpass Elite and Broadway, as well as solid growth in neurosurgical and craniomaxillofacial procedures. Meanwhile, Inari’s integration should have been progressing well, with procedural growth in the teens partially offset by ongoing destocking, suggesting an improving but still uneven contribution to consolidated growth.

Our sales estimate for the MedSurg and Neurotechnology segment is pegged at $4.46 billion.

Stryker Corporation Price and EPS Surprise

Stryker Corporation price-eps-surprise | Stryker Corporation Quote

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Stryker this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here, as you will see below.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate is -0.24% for SYK. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #3 at present.

Stocks Worth a Look

Here are some medical product stocks worth considering as these have the right combination of elements to post an earnings beat this reporting cycle.

Masimo MASI has an Earnings ESP of +8.04% and a Zacks Rank #2 at present. The company is set to release fourth-quarter 2025 results on Feb. 26.

MASI’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 12.39%. According to the Zacks Consensus Estimate, MASI’s fourth-quarter EPS is expected to decline 20.6% from the year-ago reported figure.

Hologic HOLX has an Earnings ESP of +1.97% and a Zacks Rank #3 at present. The company is set to release first-quarter fiscal 2026 results on Jan. 29.

HOLX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 1.89%. According to the Zacks Consensus Estimate, HOLX’s fiscal first-quarter EPS is expected to improve 5.8% from the year-ago reported figure.

DexCom DXCM has an Earnings ESP of +4.91% and a Zacks Rank of 3 at present. The company is slated to release fourth-quarter 2025 results on Feb. 12.

DXCM’s earnings surpassed estimates in two of the trailing four quarters and missed twice, the average surprise being 0.17%. According to the Zacks Consensus Estimate, DXCM’s fourth-quarter EPS is expected to gain 44.4% from the year-ago reported figure.

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This article originally published on Zacks Investment Research (zacks.com).

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