Medtronic (MDT -0.76%) stock slipped 2.8% through 10:15 a.m. ET this morning despite beating earnings forecasts in its fiscal Q4 2024 earnings report.

Heading into earnings, analysts had the medical devices company pegged for a $1.45 per-share profit, but Medtronic "beat" by a penny, reporting $1.46 instead. Similarly, Medtronic exceeded expectations for $8.4 billion in sales by reporting $8.6 billion.

And yet the shares are down today. Why?

Medtronic Q1 earnings

Well, earnings beats are of course wonderful, but not all Medtronic's news was good. Q4 sales that exceeded expectations still only grew about 0.5% year over year. And while Medtronic claimed a $1.46 profit, it turns out that was only if you don't count costs that Medtronic considers one-time in nature. When calculated according to generally accepted accounting principles (GAAP), Medtronic actually earned only $0.49 per share -- down 44% year over year.

I think you'll agree: This is much less impressive.

Is Medtronic stock a sell?

On the plus side, Medtronic's full-year fiscal 2024 results were stronger. Sales for the full fiscal year grew a respectable 4% to $32.4 billion, and earnings were down only 2%. Medtronic earned a $2.76 per-share GAAP profit for the year.

Can Medtronic do better than that in fiscal 2025 (i.e., this coming year)? Actually, it might.

Turning to guidance, Medtronic management forecast sales growth of between 3% and 4% this coming year, so at least $33.4 billion. That's about what Wall Street was already expecting. Similarly, earnings guidance for 4% to 5% growth to about $5.45 per share, non-GAAP, was only in line with expectations.

And that right there is Medtronic's problem. Yes, Medtronic beat earnings in fiscal 2024, but at a valuation of 27 times earnings, that was probably the bare minimum the company needed to do. To keep its 27x earnings valuation, though, Medtronic also needed to promise strong growth in the year ahead -- and Medtronic failed to do that.

Conclusion: Medtronic stock clearly costs too much. That's why investors are selling.