Boston Scientific (BSX Quick QuoteBSX - Free Report) , the Marlborough-based medical device maker, is navigating a challenging period. On Aug. 25, the company disclosed a cybersecurity incident that affected access to certain operating systems and business applications, including its ability to manufacture products, as well as process and ship customer orders.

Once detected, Boston Scientific activated its incident response protocols and launched an investigation with the help of CrowdStrike and other third-party experts. The company is working to restore affected operations, but the timeline for full recovery and the financial impact remain uncertain. The incident also comes amid a series of recent cybersecurity incidents across the medical device industry. BSX’s peer Abbott (ABT Quick QuoteABT - Free Report) faced a cyber incident in July that impacted a limited number of internal systems in its Cancer Diagnostics business, while Medtronic (MDT Quick QuoteMDT - Free Report) faced a cyber issue in April that impacted a few of its corporate IT systems.

Adding to the pressure, the latest development comes on top of a weaker annual outlook issued during the second-quarter earnings call in late July. Despite beating top- and bottom-line estimates, Boston Scientific lowered its full-year 2026 organic sales guidance to 5-6% and adjusted earnings per share (EPS) guidance to $3.28-$3.32. Foreign exchange is expected to create a roughly $0.05 headwind to the bottom line. Full-year adjusted gross margin is also projected to fall from the 2025 levels, largely due to unexpected headwinds within two high-growth franchises, WATCHMAN and Electrophysiology (“EP”).

BSX Stock Price Performance

Year to date, shares of Boston Scientific have plunged 49.1% compared with its industry’s 17% decline and the Medical sector’s 4.2% growth. The S&P 500 composite has risen 10.8% during the period. BSX has also significantly trailed both Abbott and Medtronic, whose shares have dropped 11.8% and 4%, respectively, during the same period.

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BSX’s Technical Indicators

The following chart also shows that BSX is currently trading below its 90- and 200-day simple moving averages (SMAs), pointing to continued bearish momentum.

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Factors Impacting Boston Scientific

Sluggish Recovery in Urology: The Urology business within the company’s MedSurg segment fell short of internal expectations, growing just 1% in the second quarter of 2026. The weakness stemmed from underperformance in the stone management franchise due to volume-based procurement in China, and some key product gaps in the core stone portfolio. Sacral neuromodulation also continued to see the impact of commercial model disruption. Management now expects full-year Urology growth to be flat to low-single digits.

CRM’s Portfolio Gaps: Boston Scientific’s Cardiac Rhythm Management (“CRM”) continued to face pressure, with sales down 2% in the second quarter. The core business saw a high-single-digit decline in low-voltage products and a mid-single-digit decline in high-voltage products. Competitive pressures and gaps in the company’s portfolio are adding to these challenges. Management expects growth in this division to be flat for 2026, with only modest improvement later in the year, supported by the full launch of EluPro.

WATCHMAN Demand Weakness: WATCHMAN’s U.S. market has slowed sharply and unexpectedly because of compounding clinical evidence regarding stroke risk in AF patients affecting referral patterns. The rapid uptake of concomitant procedures has also created operational inefficiencies, making it difficult to sustain growth. Against this backdrop, Boston Scientific now expects global WATCHMAN growth to be flat to low-single digits in 2026, with the second-half growth declining mid- to high-single digits on a year-over-year basis. Third-quarter U.S. sales are projected to decline sequentially, while concomitant growth is also expected to slow materially in the second half due to tougher comparisons with 2025.

Rising Competition Hits Electrophysiology: Boston Scientific is facing an unanticipated degree of competitive share movement in the U.S. EP market. The rapid adoption of the FARAPULSE technology has pushed U.S. pulsed field ablation revenues to approximately 80% of the atrial fibrillation market. With this faster-than-anticipated penetration, the company’s ability to offset some competitive pressures has become limited. Management has adjusted its market share assumptions to reflect these developments and now expects global Electrophysiology growth to be flat in the second half of 2026. U.S. sales in the third quarter are expected to decline in the mid-single digits sequentially.

As shown below, estimates for BSX’s 2026 and 2027 earnings have been steadily revised downward.

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BSX’s Valuation

Boston Scientific currently trades at a forward price/sale (P/S) of 3.17X over the past 12 months, below its median of 4.77X but above the industry average of 2.23X. The stock sits with a Value Score of C.

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Endnote

Boston Scientific is yet to fully assess the financial consequences of the cybersecurity incident, if any, that has disrupted its global operations. The company is also dealing with several other challenges across its businesses, including weaker U.S. demand in WATCHMAN and portfolio gaps within CRM. The lowered full-year 2026 financial outlook further reflects these pressures.  So far this year, BSX has been a major underperformer compared to its benchmarks and key peers. Although trading below its historical median, the stock still carries a premium to the industry. The company’s earnings outlook has also continued to slide in recent months. Given all these factors, current BSX holders should consider exiting their positions. 

Boston Scientific carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.