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Here's Why You Should Invest in Edward Lifesciences (EW) Now
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Edwards Lifesciences (EW - Free Report) is gaining investors’ confidence, backed by the solid performance of the Surgical Structural Heart business. The company is confident about the long-term potential of the TMTT (Transcatheter Mitral and Tricuspid Therapies) segment to transform care for patients with mitral and tricuspid disease. In the first quarter, TAVR (Transcatheter Aortic Valve Replacement) procedure volumes in the United States reflected improved hospital staffing levels and catch-up in procedure volumes following the holiday season slowdown.
Meanwhile, mounting expenses and an unfavorable foreign currency impact are worrisome for the company. In the past year, this Zacks Rank #3 (Hold) stock has decreased 5.6% against the 18.1% rise of the industry and the 18.2% increase of the S&P 500 composite.
The renowned global medical device company has a market capitalization of $56.17 billion. Edward Lifesciences has an earnings yield of 2.75% against the industry’s -6.45% yield. EW’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, delivering an average surprise of 1.24%.
Let’s delve deeper.
Upsides
TMTT Holds Potential: In the first quarter, the segment’s performance was driven by overall transcatheter edge-to-edge repair procedure growth, the launch and the growing uptake of PASCAL Precision in Europe and the initial launch in the United States. The system’s differentiated premium features have been met with impressive clinical feedback.
In mitral, EW continues to enroll the CLASP IIF pivotal trial with PASCAL for patients with functional mitral regurgitation. In mitral replacement, the enrollment of the ENCIRCLE pivotal trial with SAPIEN M3 is currently in motion. Within tricuspid, the CLASP II TR pivotal trial with PASCAL continues to enroll well.
Image Source: Zacks Investment Research
Surgical Structural Heart Looks Promising: In the first quarter, the robust growth of the business was driven by the penetration of its premium products across all regions. The valve surgery growth was higher than the company’s expectations as hospital staffing levels improved, leading to some catch-up in procedures.
The RESILIA portfolio continues to hold strong momentum globally. The increased adoption of the MITRIS Valve in the United States is encouraging.
Strength in the TAVR Segment: The company is optimistic about the early results of its SAPIEN 3 Ultra RESILIA launch within surgical valves in the United States. Backed by the strong track record of performance in surgical valves, the advanced RESILIA tissues anti-calcification technology is likely to represent the majority of Edward Lifesciences’ domestic TAVR sales before year-end.
Outside the United States, growth reflected positive contributions from all regions, barring Japan. In Europe, EW’s sales growth was driven by the continued strong adoption of the SAPIEN platform and was broad-based across all countries. Despite persistent disruptions related to hospital staffing shortages, total TAVR procedures grew over previous quarters.
Downsides
Foreign Exchange Headwinds: We remain worried about the significant challenges EW had to face due to an unfavorable foreign currency impact that has been adversely affecting the company’s gross margin over the past few quarters. Per management, significant currency fluctuations could have a material effect on revenues, the cost of sales and operational results.
Escalated Expenses: The contraction of both the margins in the first quarter is discouraging. A year-over-year increase in SG&A expenses reflected increased investments over the prior year in transcatheter field-based personnel to support the growth strategy.
Estimate Trend
The Zacks Consensus Estimate for 2023 earnings per share (EPS) has remained constant at $2.55 in the past 30 days.
The Zacks Consensus Estimate for the company’s 2023 revenues is pegged at $5.96 billion. This suggests a 10.7% rise from the year-ago reported number.
Haemonetics currently carries a Zacks Rank #2 (Buy). It has an earnings yield of 4.24% against the industry’s -3.02%. Haemonetics’ earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 12.21%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
HAE shares have rallied 44.4% against the industry’s 20.6% decline in the past year.
Zimmer Biomet presently carries a Zacks Rank #2. It has an earnings yield of 5.30% compared to the industry’s -3.05%. Zimmer Biomet shares have rallied 36.2% against the industry’s 20.6% decline over the past year.
ZBH’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 7.38%.
Hologic currently sports a Zacks Rank #1. It has an earnings yield of 4.93% against the industry’s -6.45%. Shares of HOLX have risen 13.6% compared with the industry’s 18.1% growth over the past year.
Hologic’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 27.32%.
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Here's Why You Should Invest in Edward Lifesciences (EW) Now
Edwards Lifesciences (EW - Free Report) is gaining investors’ confidence, backed by the solid performance of the Surgical Structural Heart business. The company is confident about the long-term potential of the TMTT (Transcatheter Mitral and Tricuspid Therapies) segment to transform care for patients with mitral and tricuspid disease. In the first quarter, TAVR (Transcatheter Aortic Valve Replacement) procedure volumes in the United States reflected improved hospital staffing levels and catch-up in procedure volumes following the holiday season slowdown.
Meanwhile, mounting expenses and an unfavorable foreign currency impact are worrisome for the company. In the past year, this Zacks Rank #3 (Hold) stock has decreased 5.6% against the 18.1% rise of the industry and the 18.2% increase of the S&P 500 composite.
The renowned global medical device company has a market capitalization of $56.17 billion. Edward Lifesciences has an earnings yield of 2.75% against the industry’s -6.45% yield. EW’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, delivering an average surprise of 1.24%.
Let’s delve deeper.
Upsides
TMTT Holds Potential: In the first quarter, the segment’s performance was driven by overall transcatheter edge-to-edge repair procedure growth, the launch and the growing uptake of PASCAL Precision in Europe and the initial launch in the United States. The system’s differentiated premium features have been met with impressive clinical feedback.
In mitral, EW continues to enroll the CLASP IIF pivotal trial with PASCAL for patients with functional mitral regurgitation. In mitral replacement, the enrollment of the ENCIRCLE pivotal trial with SAPIEN M3 is currently in motion. Within tricuspid, the CLASP II TR pivotal trial with PASCAL continues to enroll well.
Image Source: Zacks Investment Research
Surgical Structural Heart Looks Promising: In the first quarter, the robust growth of the business was driven by the penetration of its premium products across all regions. The valve surgery growth was higher than the company’s expectations as hospital staffing levels improved, leading to some catch-up in procedures.
The RESILIA portfolio continues to hold strong momentum globally. The increased adoption of the MITRIS Valve in the United States is encouraging.
Strength in the TAVR Segment: The company is optimistic about the early results of its SAPIEN 3 Ultra RESILIA launch within surgical valves in the United States. Backed by the strong track record of performance in surgical valves, the advanced RESILIA tissues anti-calcification technology is likely to represent the majority of Edward Lifesciences’ domestic TAVR sales before year-end.
Outside the United States, growth reflected positive contributions from all regions, barring Japan. In Europe, EW’s sales growth was driven by the continued strong adoption of the SAPIEN platform and was broad-based across all countries. Despite persistent disruptions related to hospital staffing shortages, total TAVR procedures grew over previous quarters.
Downsides
Foreign Exchange Headwinds: We remain worried about the significant challenges EW had to face due to an unfavorable foreign currency impact that has been adversely affecting the company’s gross margin over the past few quarters. Per management, significant currency fluctuations could have a material effect on revenues, the cost of sales and operational results.
Escalated Expenses: The contraction of both the margins in the first quarter is discouraging. A year-over-year increase in SG&A expenses reflected increased investments over the prior year in transcatheter field-based personnel to support the growth strategy.
Estimate Trend
The Zacks Consensus Estimate for 2023 earnings per share (EPS) has remained constant at $2.55 in the past 30 days.
The Zacks Consensus Estimate for the company’s 2023 revenues is pegged at $5.96 billion. This suggests a 10.7% rise from the year-ago reported number.
Key Picks
Some better-ranked stocks in the broader medical space are Haemonetics (HAE - Free Report) , Zimmer Biomet (ZBH - Free Report) and Hologic, Inc. (HOLX - Free Report) .
Haemonetics currently carries a Zacks Rank #2 (Buy). It has an earnings yield of 4.24% against the industry’s -3.02%. Haemonetics’ earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 12.21%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
HAE shares have rallied 44.4% against the industry’s 20.6% decline in the past year.
Zimmer Biomet presently carries a Zacks Rank #2. It has an earnings yield of 5.30% compared to the industry’s -3.05%. Zimmer Biomet shares have rallied 36.2% against the industry’s 20.6% decline over the past year.
ZBH’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 7.38%.
Hologic currently sports a Zacks Rank #1. It has an earnings yield of 4.93% against the industry’s -6.45%. Shares of HOLX have risen 13.6% compared with the industry’s 18.1% growth over the past year.
Hologic’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 27.32%.