• If you are wondering whether Stryker stock is offering good value right now, the recent share price moves and current valuation metrics give you a lot to weigh up.
• The stock last closed at US$330.52, with the share price up 8.5% over the past week and 8.3% over the last month, but down 5.1% year to date and down 15.6% over the past year, while still showing gains over 3 and 5 years.
• Recent coverage around Stryker has focused on its position in the medical equipment space and broader sector sentiment. This helps frame how investors are reacting to the stock's current pricing and is useful when comparing the recent pullback over the past year with the longer term positive returns.
• Stryker currently has a valuation score of 1 out of 6, meaning it screens as undervalued on only one of six checks. The next sections will walk through the different valuation approaches used to reach this view and finish with a way to look at valuation that goes beyond the standard ratios.

Stryker scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Stryker Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what Stryker stock could be worth by projecting future cash flows and discounting them back to today, using the idea that money received in the future is worth less than money in your pocket now.

For Stryker, the latest twelve month Free Cash Flow is about $4.6b. Analysts provide explicit Free Cash Flow estimates out to 2028, where projections reach roughly $5.7b, and Simply Wall St then extrapolates cash flows further using a 2 Stage Free Cash Flow to Equity model. Across the 10 year projection period, the discounted cash flows range from about $3.4b in 2026 up to about $4.1b in 2035.

Adding these discounted cash flows together and including a terminal value results in an estimated intrinsic value of $379.17 per share, compared with the recent share price of $330.52. On this measure, the DCF output implies Stryker trades at about a 12.8% discount to the calculated fair value. Under this model, the stock currently screens as undervalued.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Stryker is undervalued by 12.8%. Track this in your watchlist or portfolio, or discover 42 more high quality undervalued stocks.

Approach 2: Stryker Price vs Earnings

For a profitable company like Stryker, the P/E ratio is a useful way to relate what you pay for the stock to the earnings it currently generates. Investors usually accept a higher P/E when they expect stronger growth or see lower risk, and look for a lower P/E when growth expectations are more modest or risks are higher.

Stryker trades on a P/E of 37.97x, compared with the Medical Equipment industry average of 25.90x and a peer average of 28.45x. On these simple comparisons, the stock carries a higher earnings multiple than many sector peers.

Simply Wall St’s Fair Ratio of 31.39x is a proprietary estimate of what a more suitable P/E for Stryker could be after considering factors such as earnings growth, profit margins, industry, market cap and risk profile. This is often more informative than a straight comparison to peers or the industry, which may have very different growth outlooks and risk levels.

Setting the current P/E of 37.97x against the Fair Ratio of 31.39x suggests Stryker is pricing in more optimism than the model implies, so on this metric the stock screens as overvalued.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Stryker Narrative

Earlier it was mentioned that there is an even better way to understand valuation. On Simply Wall St you can use Narratives: short, story-driven forecasts where you and other investors set assumptions for Stryker’s future revenue, earnings and margins. You then link those assumptions to a financial model that produces a Fair Value and compare that to today’s price. The tool updates automatically when fresh news or earnings arrive. This is why one investor on the Community page might build a Narrative that justifies a Fair Value near the more optimistic US$465 analyst target, while another might lean toward the cautious end around US$315. Each is seeing the same stock but telling a different, clearly quantified story.

Do you think there's more to the story for Stryker? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.