Edwards Lifesciences (EW) AI Stock Analysis

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Edwards Lifesciences

(NYSE:EW)

68Neutral

Edwards Lifesciences' overall stock score reflects its solid financial foundation and positive strategic outlook. The strong balance sheet and robust cash flow support its growth initiatives, although operational challenges and market pressures present risks. Valuation is favorable, indicating potential for stock appreciation, while the positive earnings call sentiment enhances future growth prospects.

Positive Factors

Financial Performance

EW delivered 4Q results that outpaced Street expectations.

Market Growth

EW is pleased with S3 Ultra Resilia's commercial performance in both the US and Europe.

Negative Factors

Clinical Concerns

The Editorial published in JACC flagged several questions and points of concern, including the steep rise of primary outcomes, specifically all-cause mortality, in the TAVR arm between years 4 and 5.

Competitive Pressure

Edwards Lifesciences acknowledged a loss of TAVR share in Japan due to more aggressive pricing from competitors.

Edwards Lifesciences (EW) vs. S&P 500 (SPY)

Market Cap

$40.65B

Dividend YieldN/A

Average Volume (3M)5.02M

Price to Earnings (P/E)28.3

Beta (1Y)0.92

Revenue Growth-4.67%

EPS Growth6.23%

CountryUS

Employees15,800

SectorHealthcare

Sector Strength69

IndustryMedical - Devices

Share Statistics

EPS (TTM)2.45

Shares Outstanding585,755,500

10 Day Avg. Volume5,604,855

30 Day Avg. Volume5,024,328

Financial Highlights & Ratios

PEG Ratio4.55

Price to Book (P/B)N/A

Price to Sales (P/S)7.62

Price to Cash Flow (P/CF)-81.20

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$77.36

Price Target Upside11.47% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering19

Edwards Lifesciences Business Overview & Revenue Model

Company DescriptionEdwards Lifesciences Corporation provides products and technologies for structural heart disease, and critical care and surgical monitoring in the United States, Europe, Japan, and internationally. It offers transcatheter heart valve replacement products for the minimally invasive replacement of heart valves; and transcatheter heart valve repair and replacement products to treat mitral and tricuspid valve diseases. The company also provides the PASCAL and Cardioband transcatheter valve repair systems for minimally-invasive therapy. In addition, it offers surgical structural heart solutions, such as aortic surgical valve under the INSPIRIS name; KONECT RESILIA, a pre-assembled aortic tissue valved conduit for patients who require replacement of the valve, root, and ascending aorta; and HARPOON Beating Heart Mitral Valve Repair System for patients with degenerative mitral regurgitation. Further, the company provides critical care solutions, including advanced hemodynamic monitoring systems to measure a patient's heart function and fluid status in surgical and intensive care settings; and Acumen Hypotension Prediction Index software that alerts clinicians in advance of a patient developing dangerously low blood pressure. The company distributes its products through a direct sales force and independent distributors. Edwards Lifesciences Corporation was founded in 1958 and is headquartered in Irvine, California.

How the Company Makes MoneyEdwards Lifesciences generates revenue primarily through the sale of its medical devices and technologies. The company's key revenue streams include its transcatheter heart valve therapy products, which account for a substantial portion of its income as they cater to the growing demand for less invasive heart surgery alternatives. Additionally, Edwards earns revenue from its surgical heart valve therapy products, which include mechanical and tissue heart valves used in open-heart surgeries. Another significant revenue source is its critical care business, which offers advanced hemodynamic monitoring systems used in intensive care settings. The company also benefits from strategic partnerships with hospitals, healthcare providers, and research institutions, enhancing its market reach and product development capabilities. Factors such as an aging population and increasing prevalence of heart disease contribute to the demand for Edwards Lifesciences' products, further supporting its revenue growth.

Edwards Lifesciences Financial Statement Overview

Summary

Edwards Lifesciences exhibits financial resilience with a solid balance sheet, characterized by a low debt-to-equity ratio and strong equity position. Despite operational challenges reflected in negative EBIT and EBITDA margins, net income remains robust due to non-core factors. Cash flow generation is efficient, though strategic shifts cause fluctuations in investing and financing activities.

Income Statement

Neutral

The company's revenue has fluctuated, with a decline in 2024 from the previous year. Gross profit margin remained strong, but the negative EBIT and EBITDA margins in 2024 indicate operational challenges. Net income surged in 2024 due to other factors possibly not related to core operations, suggesting potential non-recurring items.

Balance Sheet

Positive

The balance sheet is solid with a low debt-to-equity ratio and a strong equity position, indicating financial stability. The equity ratio is high, suggesting lower reliance on debt. However, the slight increase in liabilities should be monitored.

Cash Flow

Positive

Operating cash flow declined in 2024, but the company maintained positive free cash flow. The free cash flow to net income ratio was favorable, indicating efficient cash generation relative to profits. However, fluctuations in investing and financing activities suggest strategic shifts.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
5.44B	6.00B	5.38B	5.23B	4.39B
	Gross Profit
4.32B	4.63B	4.30B	3.98B	3.31B
	EBIT
1.38B	1.53B	1.75B	1.35B	1.63B
	EBITDA
1.72B	1.77B	1.96B	1.86B	1.07B
	Net Income Common Stockholders
4.17B	1.40B	1.52B	1.50B	823.40M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.98B	1.64B	1.22B	1.47B	1.40B
	Total Assets
13.06B	9.36B	8.29B	8.50B	7.24B
	Total Debt
700.00M	694.90M	691.30M	690.30M	694.90M
	Net Debt
-2.35B	-449.10M	-77.70M	-172.50M	-488.30M
	Total Liabilities
2.99B	2.64B	2.49B	2.67B	2.66B
	Stockholders Equity
10.00B	6.65B	5.81B	5.84B	4.57B
Cash Flow		Free Cash Flow
289.90M	629.50M	953.40M	1.40B	647.00M
	Operating Cash Flow
542.30M	895.80M	1.22B	1.73B	1.05B
	Investing Cash Flow
2.31B	173.80M	252.30M	-1.72B	-531.10M
	Financing Cash Flow
-983.00M	-711.00M	-1.58B	-356.30M	-486.90M

Edwards Lifesciences Technical Analysis

Technical Analysis Sentiment

Negative

Last Price69.40

Price Trends

50DMA

71.36

Negative

100DMA

71.73

Negative

200DMA

71.65

Negative

Market Momentum

MACD

0.03

Negative

RSI

54.05

Neutral

STOCH

68.47

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EW, the sentiment is Negative. The current price of 69.4 is below the 20-day moving average (MA) of 70.57, below the 50-day MA of 71.36, and below the 200-day MA of 71.65, indicating a bearish trend. The MACD of 0.03 indicates Negative momentum. The RSI at 54.05 is Neutral, neither overbought nor oversold. The STOCH value of 68.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EW.

Edwards Lifesciences Risk Analysis

Edwards Lifesciences disclosed 23 risk factors in its most recent earnings report. Edwards Lifesciences reported the most risks in the “Legal & Regulatory” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Edwards Lifesciences Peers Comparison

Overall Rating

UnderperformOutperform

Sector (48)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ABT	79 Outperform	$220.05B	16.61	30.95%	1.76%	4.59%	134.50%
BSX	78 Outperform	$138.54B	75.09	9.03%	―	17.60%	16.84%
SYK	78 Outperform	$132.98B	44.88	15.26%	0.94%	10.23%	-5.74%
MDT	77 Outperform	$106.32B	25.20	8.42%	3.38%	2.72%	4.48%
EW	68 Neutral	$40.65B	28.33	17.17%	―	-4.67%	6.23%
DXCM	61 Neutral	$25.93B	46.43	27.63%	―	11.34%	4.24%
Sector *	48 Neutral	$6.35B	1.19	-46.26%	2.67%	19.24%	1.75%

* Healthcare Sector Average

Performance Comparison

Edwards Lifesciences

69.40

-19.80

-22.20%

ABT

Abbott Laboratories

126.88

19.64

18.31%

BSX

Boston Scientific

93.67

26.23

38.89%

DXCM

Dexcom

66.14

-68.42

-50.85%

MDT

Medtronic

82.90

5.29

6.82%

SYK

Stryker

350.28

14.26

4.24%

Edwards Lifesciences Earnings Call Summary

Earnings Call Date: Feb 11, 2025 | % Change Since: -2.13% | Next Earnings Date: Apr 23, 2025

Earnings Call Sentiment Positive

The earnings call presented a generally positive sentiment with strong sales growth, especially in TMTT, strategic acquisitions, and a positive outlook for future growth. Despite some challenges in TAVR growth and regional pressures, the company maintained a strong balance sheet and is optimistic about 2025.

Highlights

Strong Full Year Financial Performance

Sales grew 9% to $5.4 billion for 2024, in line with original guidance.

TMTT Outperformance

TMTT sales increased 77% year-over-year to $352 million, exceeding expectations.

Strategic Acquisitions

Completed acquisitions of JC Medical, JenaValve, and Endotronix, expanding opportunities in new therapeutic areas.

Strong Q4 Sales Performance

Total company sales grew 9% in Q4, with higher-than-expected earnings per share.

TAVR Growth and Expansion

TAVR global sales increased 6% year-over-year to $4.1 billion, with strong performance in the U.S. and Europe.

Positive Outlook for 2025

Guidance for 8% to 10% total company sales growth in 2025, with TMTT expected to deliver over $500 million in sales.

Healthy Balance Sheet

Maintained a strong balance sheet with approximately $3 billion in cash and cash equivalents.

Lowlights

TAVR Growth Below Expectations

While TAVR grew by 6%, growth was lower than originally expected due to capacity challenges.

Regional Sales Pressure

Experienced regional pressure in Japan, leading to slower growth compared to other regions.

Impact of Foreign Exchange

Foreign exchange rates expected to have a $130 million downside to sales in 2025.

Company Guidance

In the call, Edwards Lifesciences provided guidance indicating strong growth and strategic advancements for 2025. The company reported a 9% increase in total sales for both Q4 and the full year 2024, with sales reaching $5.4 billion. For 2025, Edwards projects total company sales to grow between 8% and 10%, targeting $5.6 billion to $6 billion, driven by transcatheter aortic valve replacement (TAVR) and transcatheter mitral and tricuspid therapies (TMTT), with the latter expected to achieve over $500 million in sales. The company also aims for a 27% to 28% adjusted operating margin for the year, leveraging strategic acquisitions and investments in innovative technologies. Edwards anticipates the early TAVR trial results to be a catalyst post-FDA approval in mid-2025, enhancing long-term growth prospects.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.