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SYK · Stryker Corporation

Medical - Devices · mkt cap $112.4B · calls: Q1 FY2026 vs Q4 FY2025
44.0 conviction · conf-adj 44

conf 5/10 partial

enthusiasm:21.0 · trend:-5 · quantifies:0 · impact:0 · under_radar:5 · credibility:12 · business_impact:8 · disruption:0 · commitment:0 · confirmation:3

Enthusiasm latest 7 / prev 8 (falling)

Stryker's AI thesis is primarily robotics-led: Mako adoption is already tied to procedure mix, implant growth, capital placements and software licenses, while SmartCare/care.ai is an emerging hospital workflow platform. The previous call was more explicit and quantified, including Mako installed base, procedure penetration and utilization; the latest call stayed positive but was dominated by cyber recovery and offered fewer AI metrics. Management is credible on surgical robotics because it connects AI-enabled systems to realized utilization and growth, but productivity AI remains aspirational by management's own admission.

GROUNDED NEXT-FY IMPACT vs CONSENSUS

Grounded on actual base — revenue $25.1B · net income $3.2B · net margin 12.9% · diluted EPS 8.4

These are next-fiscal-year annual uplift estimates, not next-quarter numbers.

Aggregate next-FY est. rev uplift: % · next-FY EPS uplift: % · vs analysts: inline · priced in: medium (model's call-read: high; verdict above is the hard-data one used for ranking) · confidence: 5/10

ClaimFigureArithmeticNext-FY Rev %Next-FY EPS %
>3,000 Mako installed base
engagement · soft		>3,000 systemsInstall base drives recurring implant pull-through but no incremental $ disclosed; no ASP/lease/unit-delta to size against $25.116B base
>2/3 US knees on Mako
engagement · soft		>66.7% penetrationPenetration metric; US knee revenue base not provided and effect already in realized revenue, no incremental $ implied
>1/3 US hips on Mako
engagement · soft		>33.3% penetrationHeadroom metric (2/3 of hips still manual) but no incremental $ figure and no US hip revenue base given
~50% global knee utilization
engagement · soft		~50%Utilization runway vs US penetration; supports future pull-through but not dollar-anchored
>20% global hip utilization
engagement · soft		>20%Low global utilization = long runway but no incremental $ disclosed
US Knee +7.6% organic (robotics)
revenue · soft		7.6% organicQ4 FY25 REALIZED growth already in the $25.1B base; segment revenue base not provided and not annualizable; not incremental to next FY
US Hips +5.6% organic (Mako)
revenue · soft		5.6% organicRealized Q4 FY25 growth, in-base, backward-looking; US hip revenue base not provided, not separable
US other Ortho +28.7% (Mako 4 launch)
revenue · soft		28.7% organicRealized capital-install surge from Mako 4; in-base. Pulls forward future implant revenue but no separable next-FY $ and no segment base disclosed
30-40% hospitals own multiple Makos
engagement · soft		30-40%Density/expansion metric ('every OR is an opportunity'); supports capital pipeline but not sized
200-300 bps ortho market outgrowth
revenue · soft		200-300 bpsOutgrowth applies to the Orthopaedics segment, not total SYK. Estimating Ortho ~$9.5B (~38% of $25.1B): midpoint 250bps -> $237.5M incremental = 0.95% of total rev. @20% incr net margin (high-margin implant pull-through, ~consensus adj. margin) -> $47.5M / $3,246M GAAP NI = 1.46% EPS. Soft because Ortho segment revenue is not disclosed in the base. (Y's 2.5% proxy applies the bps to TOTAL revenue, which Y itself flags as a wrong upper-bound)0.951.46
Mako RPS (handheld) revenue
revenue · soft		'haven't had much revenue'Explicitly immaterial today; ramp only in 2H FY26. No $/units/ASP to size

Assumptions: Only the 200-300bps ortho outgrowth is computable. Ortho segment revenue estimated at ~$9.5B (~38% of total $25.1B) — NOT disclosed, so the sizing is estimate-dependent and marked soft. Incremental net margin 20% (vs 12.9% GAAP corporate) reflecting high-margin recurring implant/service pull-through, ~consensus implied adjusted margin; tax handled inside the after-tax margin. Default tax 21% for any savings (none quantified). Phasing: 250bps midpoint taken in full for next FY (it is a FY2026 guidance figure). Segment prints (7.6%/5.6%/28.7%) treated as REALIZED FY25 results already in-base, not incremental. NOTE: consensus EPS (13.56/14.98) and NI (~5.18B) are ADJUSTED; EPS-uplift % is computed off the provided $3.246B GAAP net income base.

Top line: Robotics is the core organic-growth engine: >3,000 Makos, >2/3 of US knees and >1/3 of US hips robotic, with low global utilization (~50% knee / >20% hip) and 30-40% multiple-Mako ownership signaling a long runway. But the only forward, quantified driver is the 200-300bps ortho outgrowth — applied to an estimated ~$9.5B Ortho segment that's ~$237.5M, or ~0.95% of total revenue. The flashy segment prints (knee +7.6%, hips +5.6%, other ortho +28.7% on Mako 4) are realized FY25 results already inside the $25.1B base, not incremental upside.

Bottom line: Flowing the ~$237.5M outgrowth at a 20% incremental net margin yields ~$47.5M after-tax, ~1.46% of GAAP net income (range ~1.2-1.8% across the 200-300bps band; falls to ~0.95% if a corporate 12.9% margin is used instead). High-margin implant pull-through makes EPS leverage slightly richer than topline, but the absolute magnitude is small and within the existing earnings algorithm. No quantified AI cost-saving claims were provided.

[impact n/m (all claims soft/unanchored)] Consensus FY2026 revenue ($27.27B) is +8.6-8.8% over FY2025 actual (~$25.1B) and EPS rises ~10.4% to $14.98; management explicitly states reaffirmed guidance ALREADY assumes the 200-300bps robotic-driven outgrowth. The AI/robotics contribution (~0.95% rev, ~1.46% EPS) is a component OF consensus, not upside to it — no math points clearly above what the analysts already model. The only un-priced optionality (Mako RPS handheld, AI roadmap) is explicitly immaterial near-term.

MODEL CONSENSUS (impact)

partial

Both agree only the 200-300bps claim is sizeable and that it is priced into FY26 guidance; reconciled to X's segment-based magnitude but marked soft per Y.

Conflicts reconciled
FieldOpus 4.8GPT-5.5
Rev uplift %0.950.025
EPS uplift %1.460.025
Priced inhighhigh
vs analystsinlineinline
Confidence64
Top lineRobotics is the core organic-growth engine: >3,000 Makos, >2/3 of US knees and >1/3 of US hips now robotic, with global utilization (~50% knee / >20% hip) and 60-70% multiple-Mako headroom signaling a long runway. But the only forward, quantified driver is the 200-300bps ortho outgrowth — midpoint ~$237.5M, or ~0.95% of revenue. The flashy segment prints (knee +7.6%, hips +5.6%, other ortho +28.7% on Mako 4) are realized FY25 results already inside the $25.1B base, not incremental upside.Only the 200-300 bps outgrowth claim can be arithmetically translated with the provided base: midpoint 2.5% * $25.116B = $627.9M potential revenue uplift, but this is a soft upper-bound proxy because the claim applies to Orthopaedics, not all SYK.
Bottom lineFlowing the ~$237.5M outgrowth at a 20% incremental net margin yields ~$47.5M after-tax, ~1.46% of GAAP net income (range 1.17-1.76% across the 200-300bps band). High-margin implant pull-through makes the EPS leverage slightly richer than topline, but the absolute magnitude is small and entirely within the existing earnings algorithm.At the current 12.924% net margin, $627.9M incremental revenue would produce $81.17M incremental net income; $81.17M / $3.246B current net income = 2.5% EPS uplift. No quantified AI cost-saving claims were provided.
ReasoningConsensus FY2026 revenue ($27.27B) is +8.58% over FY2025 actual ($25.12B) and management explicitly states the reaffirmed guidance ALREADY assumes the 200-300bps robotic-driven outgrowth. The AI/robotics contribution (~0.95% rev, ~1.46% EPS) is a component OF consensus, not upside to it — there is no math pointing clearly above what the 16-19 analysts already model. The only un-priced optionality (Mako RPS handheld, AI-forward roadmap) is explicitly immaterial near-term.Consensus revenue rises from $25.066B for 2025 to $27.272B for 2026, a $2.206B increase or 8.80%. The soft AI proxy of $627.9M equals 2.5% of current revenue and is explicitly embedded in management's FY2026 outgrowth guidance language. Consensus EPS rises from $13.56383 to $14.9799, or 10.44%, versus the soft 2.5% EPS uplift proxy.

Rows highlighted where the two models disagreed.

QUANTIFICATIONS
Mako installed base: more than 3,000 Mako systems worldwide (Q4 FY2025 exit rate, topline)
“Our installed base now includes more than 3,000 Mako systems worldwide.”
U.S. knee procedures performed on Mako: over 2/3 (as exited FY2025, topline)
“As we exited the year, over 2/3 of our Knees and over 1/3 of our Hips were performed on Mako in the U.S.”
U.S. hip procedures performed on Mako: over 1/3 (as exited FY2025, topline)
“As we exited the year, over 2/3 of our Knees and over 1/3 of our Hips were performed on Mako in the U.S.”
Global Mako knee utilization: approximately 50% (as exited FY2025, topline)
“Globally, utilization rates were approximately 50% for Knees and over 20% for Hips.”
Global Mako hip utilization: over 20% (as exited FY2025, topline)
“Globally, utilization rates were approximately 50% for Knees and over 20% for Hips.”
U.S. knee growth tied to robotic-assisted procedures: 7.6% organic growth (Q4 FY2025, topline)
“Our U.S. Knee business grew 7.6% organically, reflecting our market-leading position in robotic-assisted knee procedures and continued momentum from recent Mako installations.”
U.S. hip growth tied to Mako platform adoption: 5.6% organic growth (Q4 FY2025, topline)
“Our U.S. Hips business grew 5.6% organically, highlighted by the enduring success of our Insignia hip stem and continuing adoption of our Mako robotic hip platform with expanded ability to address more difficult primary hip cases as well as hip revisions.”
U.S. other Ortho growth driven by Mako 4 installations: 28.7% organic growth (Q4 FY2025, topline)
“Our U.S. other Ortho business grew 28.7% organically, driven by robust installations in the quarter, led by momentum from the successful launch of Mako 4 in the U.S.”
Multiple Mako ownership among hospitals: 30% to 40% (Q4 FY2025 commentary, topline)
“I think we're up to 30% to 40% now have more than one Mako, but every operating room for us is an opportunity for a Mako to be installed.”
Expected orthopedic market outgrowth supported by robotic product launches: 200 to 300 basis points (FY2026 guidance commentary, topline)
“And if you look at our full year guidance that we reaffirmed that assumes we will continue to outgrow the Orthopaedic marketplace by 200 to 300 basis points, just as we have in the last few years.”
Mako RPS revenue status: haven't had much in the way of revenue (Q1 FY2026, expected to pick up in second half of FY2026, topline)
“We have the Mako RPS, the handheld. Early stage, we haven't had much in the way of revenue, but getting great feedback from customers, and so that will pick up in the second half of the year.”
PAST (realized)
CURRENT (now)
FORWARD (guidance)
TRACK RECORD — PROMISE vs DELIVERY

81/100 track record   delivers  6 calls reviewed

Stryker's quantified AI/robotic-autonomy promises center on the Mako platform, and it delivers reliably on penetration, utilization, and the Mako 4/Spine rollouts. The main blemish is the Mako Shoulder full U.S. launch slipping from Q1 2026 to mid-2026, with a few international/acquired-business targets left unclosed.

Mako Spine full U.S. commercial launch in the second half of 2025 — promised Q4 FY2024
delivered Reiterated on-track through Q1-Q3 2025; spine cited among launched Mako 4 applications by Q4 FY2025, hitting the 2H25 window.
Mako Shoulder full U.S. launch by Q1 2026 — promised Q4 FY2024
missed Slipped: by Q4 FY2025/Q1 FY2026 the full launch was pushed to mid-year 2026 on Mako 4, so the original Q1 2026 target was not met.
Grow Mako robotic penetration above the ~2/3 of U.S. knees and ~1/3 of U.S. hips exited in 2024 — promised Q4 FY2024
delivered By Q4 FY2025 reached over 2/3 of U.S. knees and over 1/3 of U.S. hips with 3,000+ installed systems and record installs.
Global Mako utilization to keep climbing from ~45% of knees / ~20% of hips — promised Q4 FY2024
delivered By Q4 FY2025 global utilization reached ~50% of knees and over 20% of hips, confirming continued adoption.
Next-gen Mako 4 smart robotic system launch and broad rollout in 2025 — promised Q1 FY2025
delivered Mako 4 launched and drove record Q4 FY2025 installs and a 28.7% jump in U.S. other-ortho.
Inari to deliver double-digit pro forma revenue growth in 2025 — promised Q2 FY2025
delivered Q3 FY2025 reported double-digit pro forma organic growth and reiterated the target; Q4 FY2025 described a strong finish, partly offset by destocking.
PRICED-IN (REFINED)
MEDIUM

Est. revisions flat  ·  Fwd P/E 21.6  ·  EV/Sales 4.9x

AI claim maps to MedSurg, Orthopaedics

Rating counts have improved modestly since late 2025, but price-target averages are falling from lastYearAvg to lastQuarterAvg to lastMonthAvg, so the revision signal is mixed rather than clearly rising. Consensus already embeds solid forward revenue and EPS growth, while valuation is rich for a mature medical-device company at 21.6x forward EPS and 4.9x EV/Sales. AI-related operating or revenue upside would most plausibly flow through MedSurg and Orthopaedics. Rich valuation makes the thesis partly priced in, but the lack of clearly rising estimates keeps the verdict at medium rather than high.
COVERAGE — ENTHUSIASM TRAJECTORY + CATALYSTS
7Q4 FY20247Q1 FY20258Q2 FY20257Q3 FY20258Q4 FY20258Q1 FY2026

AI enthusiasm across 6 calls — trend ↗ rising

Robotics stayed a concrete growth driver, then broadened into SmartCare/care.ai and Ortho Tech organizational focus.

RECENT AI CATALYSTS & NEWS
BUSINESS IMPACT - QUALITATIVE MATERIALITY

8/10 qualitative impact   material  near-term · mixed evidence

Where AI matters: robotic surgery, implant pull-through, hospital workflow

AI-enabled robotics is already central to Stryker's ortho growth engine: Mako has >3,000 systems, high knee/hip penetration, rising utilization, and links directly to implant pull-through and capital/software revenue. SmartCare/care.ai adds workflow optionality, but productivity AI is explicitly early and the quantified uplift appears material to Orthopaedics rather than transformational to all of Stryker.

Caveats: Robotics contribution is partly embedded in current growth expectations and valuation; Mako Shoulder slipped from the original Q1 2026 full-launch target; SmartCare/care.ai has positive early feedback but limited disclosed financial scale; Competitors could narrow differentiation in surgical robotics and navigation

AI DISRUPTION / CANNIBALIZATION RISK  tailwind · 1/10

AI does not automate away Stryker's core revenue model because the business sells regulated physical devices, implants, robotics platforms, and hospital systems with clinical validation, switching costs, service, and channel depth. The bigger risk is competitive robotics/AI feature parity, not broad commoditization or billable-unit deflation.

OPTIONS / MARKET STRUCTURE

option liquidity: good

ATM IV
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TYPICAL BID-ASK
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OPEN INTEREST
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proxy inputs — dollar-ADV $722M · beta 0.81 · px $293.30

source: proxy (no options chain on FMP)
FMP /stable/ exposes no options-chain endpoint on this key, so ATM IV, bid-ask spread and open interest are unavailable. Liquidity below is a PROXY from dollar-ADV, beta and price level (a stand-in for option depth), not measured option-market data.

CONFIRMATION — INSIDERS · 13F · LANGUAGE
Mixed — insiders selling, institutions adding, management language 5/10 measured.
INSIDERS selling 33 open-market sell(s) vs 0 buy(s) — net distribution
INSTITUTIONS (13F) adding as of 2026-03-31: 161 new / 201 closed positions; 1093 increased / 879 reduced; institutional ownership -2.11pp; -43 net 13F holders
MGMT LANGUAGE 5/10 measured AI barely discussed; robotics comments show real product traction, but stance is narrow and only mildly qualified.
commit “Procedural volumes were solid, supported by favorable demographics and the continued adoption of robotic-assisted surgery.”
commit “we delivered our best ever Q1 for Mako installations both in the U.S. and internationally”
commit “We continue to expect sustained momentum from installations and utilization to drive growth in our joint replacement businesses.”
VERBATIM AI QUOTES
“Procedural volumes were solid, supported by favorable demographics and the continued adoption of robotic-assisted surgery.”
— Jason Beach, Q1 FY2026
“Additionally, we delivered our best ever Q1 for Mako installations both in the U.S. and internationally, with high and increasing utilization rates across the globe.”
— Jason Beach, Q1 FY2026
“We continue to expect sustained momentum from installations and utilization to drive growth in our joint replacement businesses.”
— Jason Beach, Q1 FY2026
“So we created a new business unit called SmartCare at the beginning of this year, which combines the Vocera and the care.ai businesses.”
— Kevin Lobo, Q1 FY2026
“And the launch of Smart Hospital is really providing seamless integration.”
— Kevin Lobo, Q1 FY2026
“The feedback has been very positive. In fact, they had a really good first quarter.”
— Kevin Lobo, Q1 FY2026
“We have the Mako RPS, the handheld. Early stage, we haven't had much in the way of revenue, but getting great feedback from customers, and so that will pick up in the second half of the year.”
— Kevin Lobo, Q1 FY2026
“As they tried this, we're really in a very, very active phase of trialing and getting our customers to actually try the product, they really can't believe how well it performs.”
— Kevin Lobo, Q1 FY2026
“It's really going after a set of customers that we would have just left to the sideline prior, who see this as something that can move them from manual power tools into robotics.”
— Kevin Lobo, Q1 FY2026
“Procedural volumes remained healthy in the fourth quarter, and we continue to expect the markets will remain strong in 2026, underscored by the continued adoption of robotic-assisted surgery, favorable demographics and durable demand for our capital products.”
— Jason Beach, Q4 FY2025
“Next, powered by Mako 4, we delivered a stunning quarter and year of Mako installations with yet another record quarter both in the U.S. and worldwide.”
— Jason Beach, Q4 FY2025
“Our installed base now includes more than 3,000 Mako systems worldwide.”
— Jason Beach, Q4 FY2025
“As we exited the year, over 2/3 of our Knees and over 1/3 of our Hips were performed on Mako in the U.S.”
— Jason Beach, Q4 FY2025
“Globally, utilization rates were approximately 50% for Knees and over 20% for Hips.”
— Jason Beach, Q4 FY2025
“We've done a terrific job on AI for customer solutions, but we really haven't made a lot of progress yet on productivity with AI.”
— Kevin Lobo, Q4 FY2025
“I really want to make sure we are an AI-forward company.”
— Kevin Lobo, Q4 FY2025
“there's a lot of work we can do to drive productivity in AI.”
— Kevin Lobo, Q4 FY2025
“Mako 4 has been an absolute home run.”
— Kevin Lobo, Q4 FY2025
“I do believe this will be an extra accelerator for our Knee business and something that will live between Mako as well as our manual instruments.”
— Kevin Lobo, Q4 FY2025
ANALYST QUESTIONS ON AI
Q (Q1 FY2026, Elaine Cui): I had one on Smart Hospital, which officially launched in March. If I'm correct, can you please remind us on what are the key parts of the system? How does it differ from a hospital that's maybe already using Vocera or care.ai? And what has been the early feedback from customers?
A: Kevin Lobo said SmartCare combines Vocera and care.ai, Smart Hospital provides seamless integration with Vocera, care.ai, Secure II beds and other products, feedback was positive, and SmartCare had "a really good first quarter."
Q (Q1 FY2026, Matthew Miksic): And then on some of the new product launches like RPS, made a pretty big splash at AAOS. Maybe just an update as to what that early traction looks like, how it's either complementing deals, contracts on the Mako side or what the independent growth looks like if that's being pulled more into an ASC channel? Or just anything that you've seen so far in the launch would be great.
A: Kevin Lobo said RPS feedback is "tremendous," ASC has been "a bit of a sweet spot," adoption is easier than Mako, and it targets customers who would otherwise remain manual.
Q (Q1 FY2026, Vijay Kumar): I think there's been some questions around soft tissue robotics. I know you made some comments in the past. But as you look at the landscape, sort of how are you looking at product versus channel play within soft tissue robotics?
A: Kevin Lobo said Stryker is evaluating companies to enter soft tissue robotics, but "not predicting that we will do it" and would only proceed if confident it could create value.
Q (Q1 FY2026, Young Li): Great. Very helpful. I guess maybe one more on Mako Shoulders. It seems like the early feedback so far is pretty positive. Can you maybe level-set us a bit on the ramp expectations as well as maybe some color on the health of the shoulder market, if you saw enough data points so far.
A: Jason Beach said shoulder remains a strong, double-digit growth market, Mako Shoulder is available on Mako 3, and will be available on Mako 4 "kind of midyear."
Q (Q4 FY2025, Matthew O'Brien): I'd love to double-click a little bit on the Mako commentary, just given how strong it was. If you wouldn't mind talking a little bit about the U.S., OUS strength on the record placement side.
A: Kevin Lobo said "Mako 4 has been an absolute home run," the company has a clear leading position, and every operating room is an opportunity for a Mako installation.
Q (Q4 FY2025, Matthew O'Brien): And then you mentioned RPS. Kevin, why go with an x-ray for the imaging versus CT, which has been so successful with traditional Mako? And how do we frame up how big that could be for you guys between ASCs, International, et cetera?
A: Kevin Lobo said RPS is easier to use than Mako, targets surgeons not ready for Mako, uses Mako intellectual property for haptic boundaries, and should be "an extra accelerator" for knees.
Q (Q4 FY2025, David Roman): Maybe any latest thinking on your robotic strategy from a portfolio standpoint as you roll out Mako 4 and any updates you can provide on the handheld instrumentation?
A: Kevin Lobo said handheld cases had started and were "going very well," with AAOS as the "coming out party for Mako RPS."
Q (Q4 FY2025, David Roman): are there priorities where you can now allocate more time or that might require more of your focus, whether that's on the strategy, M&A or long-term growth side of the business?
A: Kevin Lobo said Stryker has a new leader for information technology and AI, wants to be "an AI-forward company," has done well on customer AI, and sees productivity work ahead.
Q (Q4 FY2025, Mike Matson): So with Mako 4, are you getting a pricing increase relative to the older version? And then similar question with -- as you start to launch Mako Shoulder and Spine, are there -- I seem to remember you talking about some upgrade fees the customer would have to pay even if they have an existing Mako system that they want to add that capability to.
A: Kevin Lobo said Stryker would not disclose base robot pricing, but "every time you have extra applications, you have to pay software fee or license."
Q (Q4 FY2025, Shagun Singh Chadha): One on Mako. You guys shared some metrics, 2/3, 1/3 of Knees and Hips on Mako, and then utilization rate 50% and 20%, respectively. Where do you think these metrics go over time?
A: Kevin Lobo said "robotics can become standard of care at some point in time" and "I don't see a limit to how much can be done."