Shares of medical technology company Stryker (SYK) tumbled 5.66% in after-hours trading on Thursday, despite reporting second-quarter earnings that beat analyst expectations and raising its full-year guidance.

For the second quarter, Stryker reported adjusted earnings per share of $3.13, surpassing the FactSet analyst consensus of $3.07. Revenue came in at $6.0 billion, also beating expectations of $5.9 billion. The company saw strong performance across its segments, with MedSurg and Neurotechnology net sales increasing 17.3% year-over-year.

Despite the solid results, investors appeared to focus on other factors. While Stryker raised its full-year 2025 guidance, now expecting organic net sales growth of 9.5% to 10.0% and adjusted earnings per share in the range of $13.40 to $13.60, this may not have been enough to meet the market's high expectations. The company's adjusted operating income margin of 25.7%, while an improvement from the previous year, could have fallen short of some investors' anticipations. Additionally, Stryker mentioned an estimated net impact from tariffs in 2025 of approximately $175 million, which may be weighing on sentiment.

The sharp sell-off despite beating expectations and raising guidance suggests that Stryker's stock may have been priced for perfection going into the earnings report. Investors might be taking profits after the stock's strong performance year-to-date, having gained 11.2% before this earnings release. The reaction also highlights the high expectations set for companies in the medical technology sector, where even strong results can lead to selling pressure if they don't substantially exceed market expectations.