Medtronic may have finally found its second act, and the market's first reaction looks justified. The reason is simple: Cardiac Ablation Solutions is no longer a promising side business but a real growth engine, with 78% global growth in the latest quarter and 124% growth in the U.S. That kind of acceleration helped drive Medtronic's highest annual revenue growth in 10 years, which is exactly how a mature medtech name starts to earn a fresh look. At roughly 21.6 times trailing earnings with a 3.6% dividend yield, MDT still does not look priced like a company with a new category winner inside it.
The latest quarter gave bulls the hard proof they needed. Q4 revenue came in at $9.807 billion, up 9.9% reported, while organic growth beat implied guidance by 90 basis points. More important than the beat itself was where it came from: Cardiac Ablation Solutions jumped 78% globally, Medtronic posted 124% growth in the U.S., and management said it picked up another 8 points of U.S. share. That is not cleanup growth from a sleepy legacy franchise; that is the profile of a business taking share in one of the most important device categories in cardiology.
The strength is also broad enough to matter beyond one hot launch. Medtronic's Cardiovascular Portfolio generated $3.797 billion in revenue in the quarter, up 13.8% reported and 10.1% organic, with high-teens growth in Cardiac Rhythm & Heart Failure. That matters because it shows ablation is not operating in isolation; it is helping energize a broader cardiovascular platform that already includes pacing and defibrillation products. The company is also leaning into that momentum with strategic investments in intracardiac echocardiography catheter technology tied directly to physician demand for Affera, which looks a lot like management funding a platform rather than chasing a one-quarter headline.
The valuation still leaves room for the story to work. MDT trades at 21.59 times earnings and 2.85 times sales, both well below Stryker at 35.03 times earnings and 4.60 times sales, even though Medtronic just delivered 8.4% year-over-year revenue growth and carries the balance-sheet support of an 80 Financial Health sub-score inside the TickerSpark Score. The full TickerSpark Score sits at 58, held back by weak Momentum at 30, and that is exactly why the setup is interesting: the fundamentals are improving before the stock has fully repaired its chart or sentiment scar tissue. When a company posts its strongest annual growth in a decade and still trades like a plodding incumbent, that disconnect is the opportunity.
The pushback is real, and it starts with margins. Medtronic's profitability is fine rather than elite, with a 17.8% operating margin, 13.2% net margin, and a 55 Profitability sub-score in the TickerSpark Score, while management also flagged a 130 basis point year-over-year decline in FY26 non-GAAP operating margin. If the bear case is that ablation growth is exciting but not yet translating into clean operating leverage, that is a fair read.
The stock's tape also has not fully confirmed the turnaround. MDT is still down 16.5% year to date, badly lagging healthcare by 13.5 percentage points, and it remains below its 50-day and 200-day moving averages. Yet that is exactly why the bull case still wins here: the market is being asked to believe a new growth engine before the rerating is complete, and the evidence is now strong enough to do that. Two straight quarters of roughly 80% ablation growth are harder to dismiss as launch noise, especially with share gains attached.
We'd rather own MDT than SYK right now because Medtronic has the more interesting mix of improving growth and less demanding valuation. Stryker is an excellent operator, but the market already pays up for that quality. Medtronic, by contrast, is only starting to get credit for a cardiovascular franchise that looks meaningfully stronger than it did six months ago.
What we'd watch from here is straightforward: sustained cardiac ablation share gains and evidence that revenue acceleration starts to show up in margin stability. If ablation growth cools sharply or the broader cardiovascular segment stops carrying the story, the rerating case weakens fast. Until that happens, this looks like a buy-the-turnaround-while-it-still-trades-like-an-underperformer setup, and that is usually where the best upside lives.
