SYK
Stryker Corporation
Hybrid Industrial
★ Quality 74/100Price today
$303.13
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What this business is made of
The business
Mako is the Gillette of the operating room: give away the razor, sell the blades.
Stryker makes medical devices: orthopedic implants (hip, knee), surgical equipment, neurotechnology and hospital beds. It earns by selling hardware to hospitals and, increasingly, recurring instruments and consumables around its Mako surgical robot. Revenue 2025: $25.1B with a 64% gross margin.
The Mako robot creates real switching costs: once the hospital and surgeon adopt it, Stryker's implants and consumables sell themselves. The relationship with the surgeon, trained on their system, is hard to break. Not a monopoly, but the installed base and the brand carry weight.
Revenue history
From $17.1B to $25.1B in 4 years. The business grows steadily.
Where each $100 of sales goes
Revenue $25.1B · FY2025
Of every $100 in sales, $87 goes to costs and operations; $13 is left as net profit (13% margin).
Catalysts and risks
Expansion of Mako's installed base: every robot placed drags along years of recurring high-margin implants.
Demographic growth: an aging population structurally lifts the volume of hip and knee surgeries through 2030+.
FCF of $4.3B in 2025 funds bolt-on acquisitions, the company's historical growth engine.
Debt of $14.9B against cash of $4.0B; the appetite for acquisitions has a limit if rates rise.
Pricing pressure from hospitals and insurers on devices, squeezing the 64% margin.
Direct competition from Medtronic, J&J and Zimmer in every category; no product is irreplaceable.
Charlie's note
“An honest business selling picks and shovels to a population that keeps aging. At 18 times FCF they aren't giving anything away; you pay for quality at a fair price, which is fine if you have patience.”
Analysis · June 2026
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