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Edwards Lifesciences Corp EW

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Stock XNYS Rating as of
$67.43 +0.33 (0.49%)
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Edwards Earnings: TAVR Growth Settles in Low Double Digits While New Data Pressures Shares

Debbie Wang

Edwards Lifesciences posted third-quarter results that largely met our top- and bottom-line expectations, and we're leaving our $86 fair value estimate unchanged. With quarterly sales of transcatheter aortic valve replacements, or TAVR, up 10% in constant currency, the firm is on track to meet our full-year estimates. Shares appear moderately undervalued—unusual for this narrow-moat company that has historically traded above our intrinsic value.

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Price vs Fair Value

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EW is trading at a 22% discount.
Price
$67.43
Fair Value
$94.00
Uncertainty
High
1-Star Price
$138.70
5-Star Price
$27.80
Economic Moat
Jypnct
Capital Allocation
Bdyttmyp

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 80% in 2022.

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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Trading Information

Previous Close Price
$67.10
Day Range
$67.14–68.31
52-Week Range
$60.57–94.87
Bid/Ask
$66.76 / $67.76
Market Cap
$40.90 Bil
Volume/Avg
3.1 Mil / 4.1 Mil

Key Statistics

Price/Earnings (Normalized)
26.86
Price/Sales
7.09
Dividend Yield
—
Dividend Yield (Forward)
—
Total Yield
3.17%

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, catheters, and monitoring systems used to measure a patient's heart function during surgery. The firm derives about 55% of its total sales from outside the U.S.
Sector
Healthcare
Industry
Medical Devices
Stock Style Box
Mid Core
Total Number of Employees
17,300
Website
https://www.edwards.com

Competitors

Valuation

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Metric
EW
MDT
ABT
Price/Earnings (Normalized)
 26.8614.4424.22
Price/Book Value
 6.142.044.80
Price/Sales
 7.093.294.54
Price/Cash Flow
 28.7014.1924.56
Price/Earnings
EW
MDT
ABT

Financial Strength

Metric
EW
MDT
ABT
Quick Ratio
 2.151.511.23
Current Ratio
 3.282.421.74
Interest Coverage
 —9.9010.19
Quick Ratio
EW
MDT
ABT

Profitability

Metric
EW
MDT
ABT
Return on Assets (Normalized)
 17.48%7.78%10.26%
Return on Equity (Normalized)
 24.75%13.80%20.43%
Return on Invested Capital (Normalized)
 21.63%9.76%14.39%
Return on Assets
EW
MDT
ABT

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