Edwards Lifesciences Corporation (EW - Free Report) has been gaining investor confidence on a steady spell of encouraging results. Over the past year, the stock has gained 53.9% in comparison to the industry’s 28.7% rise. Also, the company has outperformed the S&P 500’s 16.9% increase.
This manufacturer of tissue heart valves and repair products has a market cap of $34.65 billion. The company’s historical five-year growth rate is favorable at 23.4% compared with the industry’s 13.5%.
The company’s earnings estimate revision trend for the current year has been positive. In this regard, two analysts have revised their estimates upward, with no downward revision in the last 30 days. Accordingly, earnings estimates have increased 0.7% to $4.66 per share over the same period. Further, the Zacks Consensus Estimate for current-year revenues of $3.82 billion reflects an improvement of 11.1% year over year.
With solid prospects, this Zacks Rank #2 (Buy) stock is an attractive investment pick at the moment.
Let’s find out whether the recent positive trend is a sustainable one.
THVT on an Upswing
In the second quarter, the company reported Transcatheter Heart Valve Therapy (THVT) sales growth of 20% over the prior-year quarter. In the United States, THVT sales grew mid-teens year over year. Growth was driven by excellent clinical performance by SAPIEN 3 as well as continued strong therapy implementation across all regions.
Outside the United States, the procedure growth rate was in mid-teens with contributions from all regions. Double-digit procedure growth in Europe was maintained this quarter. Further, Edwards Lifesciences aims at fortifying its position in Europe with the launch of CENTERA valve, which received CE Mark in February 2018. The company is also on track with its plans to receive CE Mark and FDA approval for SAPIEN 3 Ultra this year. Edwards Lifesciences continues to see strong TAVR therapy adoption in Japan driven by SAPIEN 3.
Harpoon Medical Buyout Strategic
Edwards Lifesciences is highly optimistic about its acquisition of Harpoon Medical — a privately-held medical technology company focused on beating-heart repair for degenerative mitral regurgitation (DMR). Per the agreement, Harpoon Medical’s flagship beating-heart repair procedure for mitral valve patients — HARPOON system — will be added to Edward Lifesciences’ Surgical Heart Valve Therapy portfolio for treating structural heart disease.
We believe this buyout is strategic considering the huge and growing market of cardiovascular diseases.
Upside Potential in Emerging Economies
We believe that the huge untapped potential in emerging markets is likely to act as a positive catalyst for Edwards Lifesciences. Management is striving to strengthen its foothold in the markets of Asia, especially in Japan. Management continues to believe Japan to remain a strong geography for its business expansion among the major emerging nations.
Since the launch of its SAPIEN 3 valve in Japan in 2016, Edwards Lifesciences has witnessed strong adoption of the device across the nation. The company is looking forward to the launch of its INSPIRIS RESILIA aortic valve in Japan this year.
Other Key Picks
Other top-ranked stocks in the broader medical space are Intuitive Surgical (ISRG - Free Report) , Amedisys, Inc. (AMED - Free Report) and Masimo Corporation (MASI - Free Report) .
Intuitive Surgical’s long-term expected earnings growth rate is 14.7%. The stock currently carries a Zacks Rank of 2.
Amedisys’ long-term expected earnings growth rate is 19.4%. The stock holds a Zacks Rank #1 (Strong Buy) at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Masimo’s long-term expected earnings growth rate is 14.8%. The stock has a Zacks Rank #2 at present.
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