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Here's Why You Should Retain Edwards Lifesciences (EW) Now
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Edwards Lifesciences Corporation (EW - Free Report) is gaining from strong underlying growth across all product groups. The company continues to witness strong momentum of the RESILIA portfolio globally. However, forex woes and stiff rivalry raise apprehension.
In the past year, this Zacks Rank #3 (Hold) stock has lost 42.6% compared with a 29.7% fall of the industry and a 21.1% decline of the S&P 500 composite.
The renowned global medical device company has a market capitalization of $45.86 billion. The company’s long-term expected growth rate of 11.5% compares with the industry’s growth projection of 16.2%.
Let’s delve deeper.
Key Drivers
Q3 Upsides: Edwards Lifesciences registered year-over-year growth in earnings and revenues during the third quarter. The company registered strong underlying growth across all product groups. However, a slower-than-expected recovery of the U.S. hospital staffing trend and COVID-19 restrictions in Japan marred the growth. Adjusted EPS rose despite aggressive investment in R&D and commercial infrastructure to support new therapies.
Critical Care Business Holds Potential Amid Pandemic: Critical Care sales were up 3% on an underlying basis in the third quarter of 2022. Sales growth was driven by increased adoption of the broad portfolio of smart recovery products, including FloTrac and ClearSight sensors with unique hypotension prediction index algorithm. Additionally, demand for the HemoSphere monitoring platform remains strong.
Edwards Lifesciences expects full-year 2022 underlying sales growth in the mid-single-digit range on the back of strength in demand for products used in more intense surgeries.
Image Source: Zacks Investment Research
Surgical Structural Heart, a Promising Business: In the third quarter, the company’s Surgical Structural Heart sales improved 8.2% on an underlying basis. The company continues to witness strong momentum of the RESILIA portfolio globally as it bolsters the overall body of evidence, including 4 abstracts recently presented at the European Association for Cardiothoracic Surgery Annual Meeting in Milan. Edwards Lifesciences continues to believe that physicians value the features and benefits of this advanced tissue technology for aortic and mitral surgical valve replacement procedures. Edwards Lifesciences expects underlying sales growth for 2022 in the mid-single-digit range, driven by market growth and the adoption of premium technologies.
Downsides
Competitive Landscape: The medical devices industry is highly competitive, with the presence of several competent players. In Heart Valve Therapy, Edwards Lifesciences primarily competes with Medtronic and Sorin Group, whereas players such as ICU Medical, Pulsion Medical Systems AG, LiDCO Group and Becton, Dickinson offer competition in the other segments.
Foreign Woes: Unfavorable foreign currency impact has been affecting Edward Lifesciences’ gross margin in the past few quarters. Per management, significant currency fluctuations could have a material effect on revenues, cost of sales and operational results.
Estimate Trend
In the past 30 days, the Zacks Consensus Estimate for Edwards Lifesciences’ earnings for 2022 has remained constant at $2.45.
The Zacks Consensus Estimate for 2022 revenues is pegged at $5.37 billion, suggesting a 2.5% rise from the 2021 reported number.
Key Picks
Few other better-ranked stocks in the broader medical space that investors can consider are ShockWave Medical, Inc. (SWAV - Free Report) , Orthofix Medical Inc. (OFIX - Free Report) and Merit Medical System (MMSI - Free Report) .
ShockWave Medical, sporting a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 33.1% for 2023. The company’s earnings surpassed estimates in all the trailing four quarters, the average beat being 180.1%.
ShockWave Medical has outperformed its industry in the past year. SWAV has gained 35% against the industry’s 32.6% fall in the past year.
Orthofix Medical, currently sporting a Zacks Rank #1 (Strong Buy), reported third-quarter 2022 adjusted EPS of 13 cents, which beat the Zacks Consensus Estimate by stupendous 550%. Revenues of $114 million outpaced the consensus mark by 2.7%.
Orthofix Medical has an estimated next-year growth rate of 58.97%. MMSI’s earnings surpassed estimates in the trailing three quarters and missed in one, the average being 129.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Merit Medical, currently carrying a Zacks Rank of 2, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.
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Here's Why You Should Retain Edwards Lifesciences (EW) Now
Edwards Lifesciences Corporation (EW - Free Report) is gaining from strong underlying growth across all product groups. The company continues to witness strong momentum of the RESILIA portfolio globally. However, forex woes and stiff rivalry raise apprehension.
In the past year, this Zacks Rank #3 (Hold) stock has lost 42.6% compared with a 29.7% fall of the industry and a 21.1% decline of the S&P 500 composite.
The renowned global medical device company has a market capitalization of $45.86 billion. The company’s long-term expected growth rate of 11.5% compares with the industry’s growth projection of 16.2%.
Let’s delve deeper.
Key Drivers
Q3 Upsides: Edwards Lifesciences registered year-over-year growth in earnings and revenues during the third quarter. The company registered strong underlying growth across all product groups. However, a slower-than-expected recovery of the U.S. hospital staffing trend and COVID-19 restrictions in Japan marred the growth. Adjusted EPS rose despite aggressive investment in R&D and commercial infrastructure to support new therapies.
Critical Care Business Holds Potential Amid Pandemic: Critical Care sales were up 3% on an underlying basis in the third quarter of 2022. Sales growth was driven by increased adoption of the broad portfolio of smart recovery products, including FloTrac and ClearSight sensors with unique hypotension prediction index algorithm. Additionally, demand for the HemoSphere monitoring platform remains strong.
Edwards Lifesciences expects full-year 2022 underlying sales growth in the mid-single-digit range on the back of strength in demand for products used in more intense surgeries.
Surgical Structural Heart, a Promising Business: In the third quarter, the company’s Surgical Structural Heart sales improved 8.2% on an underlying basis. The company continues to witness strong momentum of the RESILIA portfolio globally as it bolsters the overall body of evidence, including 4 abstracts recently presented at the European Association for Cardiothoracic Surgery Annual Meeting in Milan. Edwards Lifesciences continues to believe that physicians value the features and benefits of this advanced tissue technology for aortic and mitral surgical valve replacement procedures. Edwards Lifesciences expects underlying sales growth for 2022 in the mid-single-digit range, driven by market growth and the adoption of premium technologies.
Downsides
Competitive Landscape: The medical devices industry is highly competitive, with the presence of several competent players. In Heart Valve Therapy, Edwards Lifesciences primarily competes with Medtronic and Sorin Group, whereas players such as ICU Medical, Pulsion Medical Systems AG, LiDCO Group and Becton, Dickinson offer competition in the other segments.
Foreign Woes: Unfavorable foreign currency impact has been affecting Edward Lifesciences’ gross margin in the past few quarters. Per management, significant currency fluctuations could have a material effect on revenues, cost of sales and operational results.
Estimate Trend
In the past 30 days, the Zacks Consensus Estimate for Edwards Lifesciences’ earnings for 2022 has remained constant at $2.45.
The Zacks Consensus Estimate for 2022 revenues is pegged at $5.37 billion, suggesting a 2.5% rise from the 2021 reported number.
Key Picks
Few other better-ranked stocks in the broader medical space that investors can consider are ShockWave Medical, Inc. (SWAV - Free Report) , Orthofix Medical Inc. (OFIX - Free Report) and Merit Medical System (MMSI - Free Report) .
ShockWave Medical, sporting a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 33.1% for 2023. The company’s earnings surpassed estimates in all the trailing four quarters, the average beat being 180.1%.
ShockWave Medical has outperformed its industry in the past year. SWAV has gained 35% against the industry’s 32.6% fall in the past year.
Orthofix Medical, currently sporting a Zacks Rank #1 (Strong Buy), reported third-quarter 2022 adjusted EPS of 13 cents, which beat the Zacks Consensus Estimate by stupendous 550%. Revenues of $114 million outpaced the consensus mark by 2.7%.
Orthofix Medical has an estimated next-year growth rate of 58.97%. MMSI’s earnings surpassed estimates in the trailing three quarters and missed in one, the average being 129.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Merit Medical, currently carrying a Zacks Rank of 2, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.