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Stryker (SYK) to Report Q2 Earnings: What's in the Cards?

Zacks Equity Research
·4-min read

Stryker Corporation SYK is scheduled to release second-quarter 2022 results on Jul 26, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 2.07%.

Q2 Estimates

The Zacks Consensus Estimate for second-quarter earnings per share is pegged at $2.28, indicating an increase of 1.3% year over year.

The same for revenues stands at $4.53 billion, suggesting growth of 5.6% from the prior-year quarter.

Factors to Note

Despite disruptions that stemmed from the COVID-19 resurgence during the past two quarters, Stryker's MedSurg and Neurotechnology segment witnessed substantial sales growth on the back of improvement across all its sub-segments. This momentum is likely to have continued in the second quarter.

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With respect to the Orthopaedics & Spine segment, growth across Trauma and Extremities, as well as Knees subsegments, is likely to have favored the segment's second-quarter performance. The acquisition of Wright Medical is likely to have given a boost to the Trauma & Extremities business like during the first quarter 2022.

Stryker Corporation Price and Consensus

Stryker Corporation Price and Consensus
Stryker Corporation Price and Consensus

Stryker Corporation price-consensus-chart | Stryker Corporation Quote

As declared on the first-quarter 2022 earnings call, the company is above one year into the integration process (Wright Medical deal) and continues to see progress across all regions and functions despite COVID-induced headwinds.

Stryker is committed to the sustained expansion of Mako. This growth reflects the demand for its differentiated Mako robotic technology. The company witnessed both domestic and international growth (in Japan, Korea and emerging markets) in the first quarter of 2022. The launch of the new Insignia Hip Stem, along with the Mako 4.1 software, is likely to have driven the Hips business during the second quarter. The robust demand for Mako is likely to have contributed to the Orthopaedics & Spine segment's performance in the to-be-reported quarter.

Stryker completed the acquisition of all the issued and outstanding shares of the common stock of Vocera Communications in February. Per management, the buyout will enable Stryker to enter the fast-growing digital care coordination and communications segment.

These developments are likely to have contributed to the company's performance in the to-be-reported quarter.

However, ongoing supply chain disruptions and hospital staffing shortages are likely to have hurt sales volume growth during the soon-to-be-reported quarter. Procedural volumes in China may have suffered a negative impact due to strict lockdown restrictions across major cities amid rising COVID-19 infection cases. The recent inflationary pressure is likely to have hurt net margin, limiting its growth.

What Our Quantitative Model Suggests

Per our proven model, 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.

Earnings ESP: Stryker has an Earnings ESP of 0.00%. 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 #4 (Sell).

Stocks Worth a Look

Here are a few medical stocks worth considering as these have the right combination of elements to beat on earnings this reporting cycle:

Alkermes plc ALKS has an Earnings ESP of +300.00% and a Zacks Rank of 1. ALKS has an estimated long-term growth rate of 25.1%.

Alkermes’ earnings surpassed estimates in all the trailing four quarters, with the average surprise being 350.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.

STERIS plc STE has an Earnings ESP of +1.85% and is a Zacks #1 Ranked stock. STE has an earnings yield of 4.1% against the industry’s negative yield.

STERIS’ earnings surpassed estimates in all the trailing four quarters, with the average surprise being 9.2%.

HealthEquity, Inc. HQY has an Earnings ESP of +7.24% and a Zacks Rank of 2 at present. HQY has an estimated long-term growth rate of 20.3%.

HealthEquity’searnings surpassed estimates in two of the trailing four quarters, with the average surprise being 1.4%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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Alkermes plc (ALKS) : Free Stock Analysis Report
 
Stryker Corporation (SYK) : Free Stock Analysis Report
 
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HealthEquity, Inc. (HQY) : Free Stock Analysis Report
 
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