Stryker Corporation SYK is likely to gain from solid prospects of its flagship Mako platform and an acquisition-driven strategy.
Shares of this Zacks Rank #2 (Buy) company have gained 24.9% in a year’s time against the industry’s rally of 0.3%. Moreover, the stock has outpaced the S&P 500 Index’s rally of 3.1%.
Factors to Boost Stryker
Mako Sustains Momentum
Mako is Stryker’s robotic-arm assisted surgery platform. This is the first and only robotic technology which can be used for total knee, hip and partial knee replacement procedures.
Of late, the company has witnessed a strong show by the Mako Total Knee platform on a significant rise in new robot installations. In fact, the company projects solid robot sales in 2019 at hospitals and increase in surgeon interest in robotic programs for orthopedics based on a healthy order book. Moreover, Stryker continues to see strong demand for Mako on the back of its unique features and healthy order book. This positions the company well for success in robot sales and market gains.
Stryker has been following an acquisition-driven strategy to boost its growth profile.
Last month, the company announced an agreement to acquire Mobius Imaging for a deal value of $370 million. Per management, with the latest buyout, Stryker’s Spine division is likely to foray into the intra-operative imaging space, which aligns with its implant offerings. Notably, Mobius Imaging’s Airo TruCT scanner — a real-time, diagnostic-quality CT imaging system — is expected to complement Stryker’s Spine division.
Additionally, the acquisitions of K2M Group Holdings, Arrinex, Inc. and OrthoSpace Ltd. deserve a mention.
Stryker Corporation Price and Consensus
Stryker Corporation price-consensus-chart | Stryker Corporation Quote
Which Way Are Estimates Headed?
For 2019, the Zacks Consensus Estimate for revenues is pegged at $14.87 billion, indicating an improvement of 9.3% from the year-ago period. For adjusted earnings per share (EPS), the same is pinned at $8.21, suggesting growth of 12.3% from the year-ago reported figure.
For the third quarter, the Zacks Consensus Estimate for revenues is pinned at $3.6 billion, calling for year-over-year growth of 10.5%. The same for adjusted EPS stands at $1.91, suggesting a rise of 13% year over year.
Other Key Picks
Other top-ranked stocks in the broader medical space are Varian Medical Systems VAR, Medtronic MDT and CVS Health CVS. While Varian sports a Zacks Rank #1 (Strong Buy), Medtronic and CVS Health carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Varian’s long-term earnings are anticipated to grow 8%.
Medtronic’s long-term earnings are expected to rise 7.3%.
CVS Health’s long-term earnings are likely to increase 6.6%.
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