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Edwards (EW) Gains From Balanced Core Growth and New Launches
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Edwards Lifesciences (EW - Free Report) is benefiting from strength across all product groups. The company’s bullish long-term growth strategy buoys optimism on the stock. The stock currently carries a Zacks Rank #2 (Buy).
In December 2023, Edwards announced the strategic decision to spin off the Critical Care segment at the end of 2024. The company expects this tax-free, planned separation to act strategically to its core business. With this spin-off, the company pursues more opportunities for Transcatheter Aortic Valve Replacement (TAVR), Transcatheter Mitral and Tricuspid Therapies (TMTT) and Surgical patients, as well as new investments in interventional heart failure technologies.
Following the spinoff, as an independent public company, the segment is expected to capitalize on its global leadership position in advanced patient monitoring, transforming care through AI-enabled smart monitoring solutions while expanding its reach to millions of patients around the world. With a rich legacy of pioneering innovations, the spin-off decision paves an even stronger future for this segment.
Further, within the Surgical Heart business, the RESILIA portfolio has been widely adopted because of the excellent durability of its proven tissue technology. The company is strongly optimistic about the future of this technology as it continues to expand the body of RESILIA evidence. In the fourth quarter of 2023, the business benefited from the strong global adoption of Edwards' premium RESILIA technology and overall procedural volumes. The company received CE Mark approval for the MITRIS RESILIA surgical mitral valve and has begun to launch in several European countries with positive physician feedback.
Within the company’s TAVR platform, sales are being driven by the strong performance of the Edwards SAPIEN 3 Ultra valve in the United States, Europe and Rest of World, the Edwards SAPIEN 3 Ultra RESILIA valve in the United States and the Edwards SAPIEN 3 in Japan. The business closed the fourth quarter of 2023 with strong 12% year-over-year growth, driven by a broad portfolio of innovative therapies.
On the flip side, Edwards Lifesciences has been grappling with escalated expenses for a while. In the fourth quarter of 2023, the company’s SG&A and R&D expenses rose 16.8% and 16.3%, respectively, compared to last year’s same period. On a disappointing note, the fourth quarter posted a 416-bps decline in the gross margin, while the operating margin crashed by 532 bps.
Further, foreign exchange is a major headwind for Edwards Lifesciences due to a considerable percentage of its revenues coming from outside the United States (in 2023, 42% of the company’s net sales were derived from international regions). We remain worried about the significant challenges Edward Lifesciences had to face owing to unfavorable foreign currency impact that has been adversely affecting the company’s gross margin over the past few quarters.
Other Key Picks
Some other top-ranked stocks to consider in the broader medical space are Universal Health Services (UHS - Free Report) , Integer Holdings Corporation (ITGR - Free Report) and Stryker (SYK - Free Report) .
Universal Health Services, carrying a Zacks Rank #2 at present, has an estimated growth rate of 4.4% for 2024. UHS’ earnings surpassed estimates in all the trailing four quarters, delivering an average surprise of 5.47%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
UHS’ shares have risen 6.5% in the past year compared with the industry’s 11.8% rise.
Integer Holdings, presently carrying a Zacks Rank of 2, has an estimated long-term growth rate of 15.8%. ITGR’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 11.9%.
Integer Holdings’ shares have rallied 54.8% in the past year against the industry’s 3.5% decline.
Estimates for Stryker’s 2024 earnings per share have increased from $11.53 to $11.84 in the past 30 days. Shares of the company have moved 28.8% north in the past year compared with the industry’s rise of 4%. SYK carries a Zacks Rank #2 currently.
SYK’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 5.1%. In the last reported quarter, it delivered an earnings surprise of 5.8%.
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Edwards (EW) Gains From Balanced Core Growth and New Launches
Edwards Lifesciences (EW - Free Report) is benefiting from strength across all product groups. The company’s bullish long-term growth strategy buoys optimism on the stock. The stock currently carries a Zacks Rank #2 (Buy).
In December 2023, Edwards announced the strategic decision to spin off the Critical Care segment at the end of 2024. The company expects this tax-free, planned separation to act strategically to its core business. With this spin-off, the company pursues more opportunities for Transcatheter Aortic Valve Replacement (TAVR), Transcatheter Mitral and Tricuspid Therapies (TMTT) and Surgical patients, as well as new investments in interventional heart failure technologies.
Following the spinoff, as an independent public company, the segment is expected to capitalize on its global leadership position in advanced patient monitoring, transforming care through AI-enabled smart monitoring solutions while expanding its reach to millions of patients around the world. With a rich legacy of pioneering innovations, the spin-off decision paves an even stronger future for this segment.
Edwards Lifesciences Corporation Price
Edwards Lifesciences Corporation price | Edwards Lifesciences Corporation Quote
Further, within the Surgical Heart business, the RESILIA portfolio has been widely adopted because of the excellent durability of its proven tissue technology. The company is strongly optimistic about the future of this technology as it continues to expand the body of RESILIA evidence. In the fourth quarter of 2023, the business benefited from the strong global adoption of Edwards' premium RESILIA technology and overall procedural volumes. The company received CE Mark approval for the MITRIS RESILIA surgical mitral valve and has begun to launch in several European countries with positive physician feedback.
Within the company’s TAVR platform, sales are being driven by the strong performance of the Edwards SAPIEN 3 Ultra valve in the United States, Europe and Rest of World, the Edwards SAPIEN 3 Ultra RESILIA valve in the United States and the Edwards SAPIEN 3 in Japan. The business closed the fourth quarter of 2023 with strong 12% year-over-year growth, driven by a broad portfolio of innovative therapies.
On the flip side, Edwards Lifesciences has been grappling with escalated expenses for a while. In the fourth quarter of 2023, the company’s SG&A and R&D expenses rose 16.8% and 16.3%, respectively, compared to last year’s same period. On a disappointing note, the fourth quarter posted a 416-bps decline in the gross margin, while the operating margin crashed by 532 bps.
Further, foreign exchange is a major headwind for Edwards Lifesciences due to a considerable percentage of its revenues coming from outside the United States (in 2023, 42% of the company’s net sales were derived from international regions). We remain worried about the significant challenges Edward Lifesciences had to face owing to unfavorable foreign currency impact that has been adversely affecting the company’s gross margin over the past few quarters.
Other Key Picks
Some other top-ranked stocks to consider in the broader medical space are Universal Health Services (UHS - Free Report) , Integer Holdings Corporation (ITGR - Free Report) and Stryker (SYK - Free Report) .
Universal Health Services, carrying a Zacks Rank #2 at present, has an estimated growth rate of 4.4% for 2024. UHS’ earnings surpassed estimates in all the trailing four quarters, delivering an average surprise of 5.47%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
UHS’ shares have risen 6.5% in the past year compared with the industry’s 11.8% rise.
Integer Holdings, presently carrying a Zacks Rank of 2, has an estimated long-term growth rate of 15.8%. ITGR’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 11.9%.
Integer Holdings’ shares have rallied 54.8% in the past year against the industry’s 3.5% decline.
Estimates for Stryker’s 2024 earnings per share have increased from $11.53 to $11.84 in the past 30 days. Shares of the company have moved 28.8% north in the past year compared with the industry’s rise of 4%. SYK carries a Zacks Rank #2 currently.
SYK’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 5.1%. In the last reported quarter, it delivered an earnings surprise of 5.8%.