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Edwards' (EW) Innovation Aids Growth, Critical Care Flourishes
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Edwards Lifesciences' (EW - Free Report) huge untapped potential in emerging markets acts as a positive catalyst for its growth in the cardiovascular device market. The company’s bullish long-term growth strategy buoys optimism for the stock, which carries a Zacks Rank #2 (Buy).
Edwards Lifesciences exited the first quarter of 2023 on a bullish note with better-than-expected earnings and revenues. It also registered year-over-year growth on both fronts. The company’s TMTT segment recorded strong growth, driven by the continued adoption of the PASCAL Precision system in Europe.
During the quarter, EW completed the enrollment of the TRISCEND II pivotal trial for the EVOQUE Tricuspid Valve Replacement System. Further, growth within Surgical Structural Heart was lifted by the increased adoption of Edwards' premium products across all regions. The company raised its full-year 2023 guidance, which is encouraging too.
Critical Care sales were up 9% on an underlying basis in the first quarter of 2023. Sales growth was led by the Smart Recovery portfolio and the strong adoption of the Acumen IQ sensor and finger cuff featuring a unique Hypotension Prediction Index algorithm.
The demand for Swan-Ganz pulmonary artery catheters and the HemoSphere monitoring platform also remained strong in the first quarter, with a healthy pipeline of future opportunities. The company remains excited about its pipeline of Critical Care innovations as it continues to shift its focus to Smart Recovery technologies designed to help clinicians make better decisions and get patients home to their families faster.
Based on the strong first-quarter performance, Edwards Lifesciences now expects Critical Care full-year 2023 sales in the band of $870-$940 million.
Meanwhile, the contraction of both margins in the first quarter is discouraging. In the first quarter, the gross margin contracted 25 basis points (bps) to 77.4%. The company-provided adjusted gross margin was 77.5%, a 30-basis point contraction year over year. This year-over-year reduction was due to a less favorable impact from foreign exchange. During the quarter, operating income fell 2.3% year over year. The operating margin contracted 339 bps to 29.6%.
We also remain worried about the significant challenges Edward Lifesciences is facing due to an unfavorable foreign currency impact that has been adversely affecting the company’s profitability.
Meanwhile, the medical device 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 other segments.
In the past year, Edwards Lifesciences has underperformed its industry. The stock has declined 6.9% against the 9.1% rise of the industry.
Haemonetics stock has risen 29.8% in the past year. The Zacks Consensus Estimate for Haemonetics’ earnings per share (EPS) has increased from $3.55 to $3.56 for fiscal 2024 and remained constant at $3.96 for fiscal 2025 in the past 30 days.
HAE’s earnings beat estimates in each of the trailing four quarters, the average surprise being 12.21%. In the last reported quarter, the company registered an earnings surprise of 13.24%.
The Zacks Consensus Estimate for Zimmer Biomet’s 2023 EPS has remained constant at $7.45 in the past 30 days. Shares of the company have improved 38.3% in the past year against the industry’s 22.6% decline.
ZBH’s earnings beat estimates in each of the trailing four quarters, the average surprise being 7.38%. In the last reported quarter, the company recorded an earnings surprise of 13.86%.
The Zacks Consensus Estimate for SiBone’s 2023 loss per share has narrowed from $1.44 to $1.42 in the past 30 days. SIBN shares have improved 103.5% in the past year compared with the industry’s 8.9% growth.
SiBone’s earnings beat estimates in three of the trailing four quarters and missed the same in one, the average surprise being 11.11%. In the last reported quarter, the company recorded an earnings surprise of 21.95%.
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Edwards' (EW) Innovation Aids Growth, Critical Care Flourishes
Edwards Lifesciences' (EW - Free Report) huge untapped potential in emerging markets acts as a positive catalyst for its growth in the cardiovascular device market. The company’s bullish long-term growth strategy buoys optimism for the stock, which carries a Zacks Rank #2 (Buy).
Edwards Lifesciences exited the first quarter of 2023 on a bullish note with better-than-expected earnings and revenues. It also registered year-over-year growth on both fronts. The company’s TMTT segment recorded strong growth, driven by the continued adoption of the PASCAL Precision system in Europe.
During the quarter, EW completed the enrollment of the TRISCEND II pivotal trial for the EVOQUE Tricuspid Valve Replacement System. Further, growth within Surgical Structural Heart was lifted by the increased adoption of Edwards' premium products across all regions. The company raised its full-year 2023 guidance, which is encouraging too.
Critical Care sales were up 9% on an underlying basis in the first quarter of 2023. Sales growth was led by the Smart Recovery portfolio and the strong adoption of the Acumen IQ sensor and finger cuff featuring a unique Hypotension Prediction Index algorithm.
Edwards Lifesciences Corporation Price
Edwards Lifesciences Corporation price | Edwards Lifesciences Corporation Quote
The demand for Swan-Ganz pulmonary artery catheters and the HemoSphere monitoring platform also remained strong in the first quarter, with a healthy pipeline of future opportunities. The company remains excited about its pipeline of Critical Care innovations as it continues to shift its focus to Smart Recovery technologies designed to help clinicians make better decisions and get patients home to their families faster.
Based on the strong first-quarter performance, Edwards Lifesciences now expects Critical Care full-year 2023 sales in the band of $870-$940 million.
Meanwhile, the contraction of both margins in the first quarter is discouraging. In the first quarter, the gross margin contracted 25 basis points (bps) to 77.4%. The company-provided adjusted gross margin was 77.5%, a 30-basis point contraction year over year. This year-over-year reduction was due to a less favorable impact from foreign exchange. During the quarter, operating income fell 2.3% year over year. The operating margin contracted 339 bps to 29.6%.
We also remain worried about the significant challenges Edward Lifesciences is facing due to an unfavorable foreign currency impact that has been adversely affecting the company’s profitability.
Meanwhile, the medical device 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 other segments.
In the past year, Edwards Lifesciences has underperformed its industry. The stock has declined 6.9% against the 9.1% rise of the industry.
Other Key Picks
Some other top-ranked stocks in the overall healthcare sector are Haemonetics (HAE - Free Report) , Zimmer Biomet (ZBH - Free Report) and SiBone (SIBN - Free Report) . While Haemonetics sports a Zacks Rank #1 (Strong Buy), Zimmer Biomet and SiBone each carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Haemonetics stock has risen 29.8% in the past year. The Zacks Consensus Estimate for Haemonetics’ earnings per share (EPS) has increased from $3.55 to $3.56 for fiscal 2024 and remained constant at $3.96 for fiscal 2025 in the past 30 days.
HAE’s earnings beat estimates in each of the trailing four quarters, the average surprise being 12.21%. In the last reported quarter, the company registered an earnings surprise of 13.24%.
The Zacks Consensus Estimate for Zimmer Biomet’s 2023 EPS has remained constant at $7.45 in the past 30 days. Shares of the company have improved 38.3% in the past year against the industry’s 22.6% decline.
ZBH’s earnings beat estimates in each of the trailing four quarters, the average surprise being 7.38%. In the last reported quarter, the company recorded an earnings surprise of 13.86%.
The Zacks Consensus Estimate for SiBone’s 2023 loss per share has narrowed from $1.44 to $1.42 in the past 30 days. SIBN shares have improved 103.5% in the past year compared with the industry’s 8.9% growth.
SiBone’s earnings beat estimates in three of the trailing four quarters and missed the same in one, the average surprise being 11.11%. In the last reported quarter, the company recorded an earnings surprise of 21.95%.