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Robust Pipeline Aids Edwards Lifesciences, Rising Costs Ail

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On Dec 27, we issued an updated research report on Edwards Lifesciences Corporation (EW - Free Report) . The stock carries a Zacks Rank #3 (Hold).

Over the last three months, this leading molecular diagnostic company has been trading above the broader industry. The stock has gained 4.7% compared with the broader industry’s 1.8% rise during the period.

 

 

On a positive note, the company reported Transcatheter Heart Valve Therapy (THVT) sales growth of 17.3% in the third quarter of 2017, reflecting a rise over the prior-year period. This upside was led by a strong continued adoption of the therapy across all geographical regions. Per management, THVT adoption in the reported quarter grew consistently on robust performance of its SAPIEN 3 valve.

We are also encouraged by the company’s long-term growth strategies and its recent progress in technology pipeline. As far as transcatheter heart valve is concerned, Edwards Lifesciences expects to maintain its leadership position in the global Transcatheter Aortic Valve Replacement (TAVR) market.

The TAVR adoption rate in Japan and European countries continues to surpass the same in those regions where the therapy is more popularly well-established. In the U.K., the company’s optimism gets further boosted by the proposal of implementing TAVR technology for treatment purposes by the reimbursement authority of NICE.

Also, the company’s focus on building its pipeline to strengthen foothold across all operating businesses bodes well. Edwards Lifesciences has also witnessed growth in its emerging portfolio of mitral and tricuspid repair therapies.

On the flip side, natural disasters impacted sales in the third quarter to the tune of $2 million. Also, higher operating expenses continue to be a drag. Stiff competition, currency headwind and reimbursement issues are other challenges to cope with.

Key Picks

Some better-ranked stocks from the same space are Masimo Corporation (MASI - Free Report) , Tactile Systems Technology (TCMD - Free Report) and Integer Holdings Corporation (ITGR - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Masimo has an expected growth rate of 43.40% this year. The stock has rallied 28.3%, ahead of the broader industry’s gain of 22.1% over a year.

Tactile Systems has an estimated annual growth rate of 123.33%. The stock has soared 80.5%, above the broader industry’s gain in the last 12 months.

Integer Holdings has a projected growth rate of 85.37% in the next quarter. The stock has surged 51.3%, outperforming the broader industry’s increase over a year’s time.

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