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Edwards Lifesciences Corp EW

Morningstar Rating
$89.14 −0.97 (1.08%)
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Company Report

Edwards Earnings: Impressive US Growth for Pascal Thanks to Steady Increase in New Centers

Narrow-moat Edwards Lifesciences kicked off the year with solid results, and the slight adjustments we’ve made to incorporate stronger growth in the transcatheter mitral and tricuspid business (TMTT) weren’t enough to shift our fair value estimate. While quarterly Sapien sales grew 8% in constant currency and adjusted for billing days, the TMTT business displayed unexpected strength by growing at 75%, albeit off a much smaller base. Nonetheless, this fast start in 2024 led management to raise its outlook for that product segment and indicate revenue for the year would be at the higher end of guidance. Our full-year estimates were already on the high side and remain bounded by management’s range.

Price vs Fair Value

EW is trading at a 33% premium.
Price
$89.14
Fair Value
$43.00
Uncertainty
High
1-Star Price
$311.60
5-Star Price
$68.90
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Edwards' efforts to focus on efficiency and higher-margin products have paid off, as gross margins increased from 47% in 2000 to 77% in 2023.

Bears

Edwards' ambitions to diversify into minimally invasive medical technologies place the firm in direct competition with much larger competitors, such as Medtronic and Abbott, which can easily bid up prices for emerging technologies that Edwards couldn't match.

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News

Trading Information

Previous Close Price
$90.11
Day Range
$88.5890.48
52-Week Range
$60.5796.12
Bid/Ask
$87.59 / $92.00
Market Cap
$53.72 Bil
Volume/Avg
2.1 Mil / 3.3 Mil

Key Statistics

Price/Earnings (Normalized)
34.96
Price/Sales
8.82
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield
1.17%

Company Profile

Spun off from Baxter International in 2000, Edwards Lifesciences designs, manufactures, and markets a range of medical devices and equipment for advanced stages of structural heart disease. It has established itself as a leader across key products, including surgical tissue heart valves, transcatheter valve technologies, surgical clips, and catheters. The firm derives about 55% of its total sales from outside the US.
Sector
Healthcare
Industry
Medical Devices
Stock Style Box
Mid Growth
Total Number of Employees
19,800

Competitors

Valuation

Metric
EW
MDT
ABT
Price/Earnings (Normalized)
34.9615.8823.89
Price/Book Value
7.542.214.70
Price/Sales
8.823.544.55
Price/Cash Flow
37.1815.6418.35
Price/Earnings
EW
MDT
ABT

Financial Strength

Metric
EW
MDT
ABT
Quick Ratio
2.321.461.16
Current Ratio
3.752.301.64
Interest Coverage
8.8610.86
Quick Ratio
EW
MDT
ABT

Profitability

Metric
EW
MDT
ABT
Return on Assets (Normalized)
16.80%7.75%10.63%
Return on Equity (Normalized)
23.64%13.75%20.87%
Return on Invested Capital (Normalized)
20.49%9.87%14.81%
Return on Assets
EW
MDT
ABT
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