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Edwards Lifesciences (EW)
NYSE:EW
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Edwards Lifesciences
(NYSE:EW)
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Rating:75Outperform
Price Target:
$94.00
▲(15.14% Upside)
Action:ReiteratedDate:02/26/26
The score is driven primarily by strong financial quality (high margins and an exceptionally low-debt balance sheet) and a constructive earnings outlook with confident 2026 guidance and continued structural-heart momentum. These strengths are tempered by an expensive valuation (high P/E, no dividend support) and mixed near-term technical momentum (negative MACD despite trading above key moving averages).
Positive Factors
Conservative balance sheet
Extremely low debt and a conservative capital structure provide durable financial flexibility. This supports continued R&D and commercial investment, sizeable share buybacks, and resilience against reimbursement or procedure-volume shocks, preserving strategic optionality over multiple years.
High margin profile
Sustained industry-leading gross and operating margins indicate strong product mix and pricing power in structural heart devices. Durable margins enable reinvestment in clinical evidence and field resources while funding capital returns, supporting long-term EBITA generation even with mid-cycle sales variability.
Durable structural growth drivers
Market-leading TAVR franchise, accelerating TMTT adoption, and recent product launches create multi-year growth tailwinds. Strong clinical evidence (PARTNER studies), guideline momentum, and new device rollouts expand the addressable market and support sustainable procedure-level demand and share gains.
Negative Factors
Uneven revenue trend
Revenue growth has been lumpy, reducing visibility for multi-quarter forecasting. Dependence on procedure adoption cycles, regional reimbursement, and discrete product launches means top-line can swing by year, complicating planning for investment pacing and margin improvement capture.
Volatile cash conversion
While 2025 showed a strong cash rebound, multi-year volatility in converting earnings to operating and free cash flow raises sustainability concerns. Inconsistent cash conversion can limit reliable funding for buybacks, large R&D programs, or M&A without drawing on balance sheet flexibility.
Rising SG&A and one‑time charges
Material step-up in selling and access spending raises operating leverage and pushes near-term profitability lower absent commensurate revenue gains. Additionally, one-time M&A-related charges and litigation introduce earnings volatility and signal execution risk on inorganic expansion plans.
Edwards Lifesciences (EW) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$47.42B
Dividend YieldN/A
Average Volume (3M)4.81M
Price to Earnings (P/E)46.4
Beta (1Y)0.66
Revenue Growth0.19%
EPS Growth65.58%
CountryUS
Employees15,800
SectorHealthcare
Sector Strength45
IndustryMedical - Devices
Share Statistics
EPS (TTM)0.58
Shares Outstanding580,800,000
10 Day Avg. Volume4,946,506
30 Day Avg. Volume4,813,892
Financial Highlights & Ratios
PEG Ratio-0.63
Price to Book (P/B)4.82
Price to Sales (P/S)8.22
P/FCF Ratio37.34
Enterprise Value/Market Cap0.98
Enterprise Value/Revenue7.70
Enterprise Value/Gross Profit9.85
Enterprise Value/Ebitda33.57
Forecast
1Y Price Target
$96.88Price Target Upside18.67% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering21
EPS Forecast (FY)2.97
Revenue Forecast (FY)$6.68B
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, which are categorized into various segments including heart valve therapies and critical care technologies. The heart valve segment, particularly TAVR, is a significant source of income, driven by increasing adoption rates and expanding indications for use in treating aortic stenosis. Additionally, the company earns revenue from hemodynamic monitoring products, which are used in hospitals to assess and manage critically ill patients. Key partnerships with hospitals and healthcare systems, along with ongoing clinical studies that support the efficacy of its products, further enhance its revenue generation. Moreover, the company's commitment to innovation and development of new technologies positions it favorably in the competitive landscape, contributing to sustained growth in its earnings.
Edwards Lifesciences Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where Edwards Lifesciences is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where Edwards Lifesciences is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyEdwards Lifesciences Earnings Call Summary
Earnings Call Date:Feb 10, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call conveys a broadly positive outlook: the company delivered strong top‑line growth (Q4 +11.6%, FY +10.7%), robust TAVR and TMTT momentum, and reiterated confident 2026 guidance (8%–10% sales growth; EPS $2.90–$3.05). Key positives include compelling long‑term clinical evidence, successful product launches (SAPIEN M3, NextGen PASCAL), margin discipline and a healthy balance sheet. Near‑term headwinds are primarily deliberate investments in patient access and field resources (driving higher SG&A), one‑time GAAP charges (GennaValve/litigation), an elevated tax rate in the quarter, and distributor inventory adjustments that modestly impacted surgical sales. Management frames the incremental spending as strategic and expects margin expansion over time. Overall, the positive operational and strategic catalysts outweigh the one‑time and timing‑related negatives.Q4-2025 Updates
Positive Updates
Strong Q4 and Full-Year Sales Growth
Total sales of $1.57 billion in Q4, up 11.6% year‑over‑year; full‑year 2025 sales growth of 10.7% — demonstrating broad-based demand and momentum entering 2026.
TAVR Performance and Clinical Momentum
TAVR Q4 global sales of $1.16 billion, up 10.6% year‑over‑year; overall procedural growth in the quarter remained in the high single digits. Strength supported by seven‑year PARTNER 3 and ten‑year PARTNER 2 durability data, Early TAVR evidence (including asymptomatic indication), strong SAPIEN 3 Ultra Resilia adoption, and supportive Europe guideline changes — all cited as durable growth catalysts.
TMTT Segment Surge
TMTT grew over 40% in Q4 to $156 million; full‑year TMTT sales exceeded $500 million. Growth driven by PASCAL and EVOQUE adoption, FDA approval and initial launch of SAPIEN M3, NextGen PASCAL rollout, and expected contribution toward a $2 billion TMTT revenue target by 2030.
Surgical Business Milestones
Surgical Q4 sales of $254 million, up 2% year‑over‑year; full‑year surgical sales grew 4.3% and exceeded $1 billion for the first time. Positive MOMENTYS one‑year data (100% freedom from SVD) and planned initial introduction of surgical LAAC later this year provide new product and clinical catalysts.
Profitability and Margin Discipline
Q4 adjusted gross profit margin of 78.3% (vs. 79% year‑ago) and Q4 adjusted operating profit margin of 23.7%; full‑year 2025 adjusted operating margin of 27%. Company expects full‑year 2026 adjusted gross margin to be ~78%–79% and forecasted ~150 basis points of constant‑currency operating margin expansion in 2026.
Strong Balance Sheet and Capital Return
Approximately $3 billion in cash and cash equivalents as of Dec 31, 2025; repurchased just under $900 million of stock in 2025 (including ~$40 million in Q4) and ~ $2 billion of share repurchase authorization remaining.
Confident 2026 Guidance and Near‑Term Outlook
Management expressed increased confidence in meeting 2026 sales growth guidance of 8%–10% and EPS guidance of $2.90–$3.05. Q1 2026 sales guidance of $1.55 billion–$1.63 billion and Q1 adjusted EPS guidance of $0.70–$0.76; FX expected to provide ~ $40 million upside to full‑year 2026 sales at current rates.
Patient Access & Clinical Engagement Initiatives
Increased investments in patient access initiatives, including partnership with the American Heart Association Heart Valve initiative, European guideline dissemination efforts, and field force reinforcement — aimed at driving earlier, guideline‑based treatment and expanding addressable market.
Negative Updates
Adjusted EPS Below Expectations and One‑Time GAAP Impact
Q4 adjusted EPS was $0.58, below expectations due to higher spending on patient access initiatives and an above‑expected tax rate. GAAP EPS was $0.11 and included one‑time charges related to the GennaValve acquisition that did not close and litigation expenses.
Step‑Up in SG&A Spending
Selling, general & administrative expense increased to $603 million (38% of sales) in Q4 versus 35% in the prior year — a year‑over‑year step‑up of approximately $112 million largely due to accelerated patient access, education, and field investments.
Tax Rate Headwind
Reported quarterly tax rate was 29% (17.9% excluding special items), above expectations driven by Pillar Two impact and country income mix; company expects 2026 tax rate excluding special items to be 16%–19%.
One‑Time/Deal‑Related Charges and M&A Uncertainty
Charges associated with the GennaValve acquisition that did not close and related litigation were recorded in GAAP results — illustrating setback in a specific M&A effort and introducing one‑time earnings volatility.
Distributor Inventory Adjustment Impacting Surgical Q4
Surgical Q4 growth was impacted by an end‑of‑year distributor inventory adjustment in one country (managed via distributors, cited example: China); surgical growth in Q4 was only 2%.
Seasonality and Tougher Second‑Half Comparisons for 2026
Management noted that 2026 will have stronger first‑half growth and tougher year‑over‑year comps and seasonality in the second half, creating a more challenging cadence to achieve full‑year guidance.
Uncertainty Around Moderate AS Opportunity
While management highlighted the PROGRESS moderate AS study as a potential long‑term opportunity, results are pending (to be presented at TCT) and therefore moderate AS is not included as a near‑term confirmed catalyst.
Relative Contribution from Competitor Exit to Near‑Term Share Gains
Management acknowledged that part of recent share gains was attributable to a competitor exit (Boston Scientific) and while gains appear sticky, some share movement reflects market dynamics rather than pure organic displacement.
Company Guidance
Management reiterated and said it has increased confidence in 2026 guidance: full‑year sales growth of 8–10% and adjusted EPS of $2.90–$3.05, with Q1 sales of $1.55–$1.63 billion and Q1 adjusted EPS of $0.70–$0.76 (mid‑teens growth at the midpoint). They reported Q4 sales of $1.57 billion (+11.6% YoY), Q4 adjusted EPS $0.58 (GAAP EPS $0.11), TAVR Q4 sales $1.16 billion (+10.6%, procedural growth high single‑digit), TMTT Q4 $156 million (>40% growth; FY TMTT >$500M) and Surgical Q4 $254 million (+2%, FY surgical >$1B); Q4 adjusted gross margin 78.3% (vs 79% prior) and adjusted operating margin 23.7% (FY‑2025 adjusted operating margin 27%). For 2026 they expect adjusted gross margin ~78–79%, R&D ≈17% of sales, ~150 bps constant‑currency operating margin expansion in 2026 (and 50–100 bps annually thereafter), a 2026 tax rate ex‑special items of 16–19% (Q4 reported tax 29%, 17.9% ex‑special items), ~ $3.0B cash, ~$2.0B buyback authorization remaining, average diluted shares ~580–585M (582M in Q4), and FX contributed ~170 bps / $20M to Q4 reported sales and is expected to add ~ $40M to full‑year 2026 sales.Edwards Lifesciences Financial Statement Overview
Summary
Strong overall fundamentals supported by very high margins and a notably conservative balance sheet (debt reduced to extremely low levels). Offsets include uneven revenue growth and volatility in earnings quality and cash-flow conversion (notably weaker conversion in 2024 before rebounding in 2025).Income Statement
Revenue has grown over time (from ~$4.4B in 2020 to ~$6.1B in 2025), though the trajectory has been uneven with a decline in 2023 and only modest growth in 2024–2025. Profitability is a clear strength: gross margin remains very high (~75–79%) and operating profitability is solid, with 2025 showing healthy operating margin (~21%) and net margin (~18%). A key weakness is volatility in earnings quality across years—most notably the unusually high 2024 net margin—making year-to-year comparability less stable than revenue trends suggest.78
Positive
Balance Sheet
The balance sheet is very conservative and strengthens meaningfully by 2025: total debt falls sharply to ~$0.1B, driving extremely low leverage (debt-to-equity ~0.01). Equity and assets have expanded over the period, supporting financial flexibility. Return on equity is positive but has swung widely (very high in 2024 and much lower in 2025), suggesting profitability on equity is not consistently stable even though the capital structure is strong.92
Very Positive
Cash Flow
Cash generation is solid overall, with 2025 showing strong operating cash flow (~$1.6B) and free cash flow (~$1.3B) alongside a sharp rebound in free-cash-flow growth. Free cash flow is generally a good proportion of earnings (roughly ~0.6–0.8 in most years, ~0.84 in 2025). The main weakness is volatility: 2024 cash flow conversion is notably weaker (operating cash flow materially below earnings), and free cash flow growth was negative in several years before the 2025 jump.74
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 6.07B | 5.44B | 5.01B | 5.38B | 5.23B |
| Gross Profit | 4.74B | 4.32B | 3.97B | 4.22B | 4.01B |
| EBITDA | 1.43B | 1.72B | 1.53B | 1.96B | 1.89B |
| Net Income | 1.07B | 4.17B | 1.40B | 1.52B | 1.50B |
Balance Sheet | |||||
| Total Assets | 13.70B | 13.06B | 9.36B | 8.29B | 8.50B |
| Cash, Cash Equivalents and Short-Term Investments | 4.23B | 3.98B | 1.63B | 1.22B | 1.47B |
| Total Debt | 705.40M | 700.00M | 685.10M | 691.30M | 690.30M |
| Total Liabilities | 3.36B | 2.99B | 2.64B | 2.49B | 2.67B |
| Stockholders Equity | 10.34B | 10.00B | 6.65B | 5.81B | 5.84B |
Cash Flow | |||||
| Free Cash Flow | 1.33B | 289.90M | 629.50M | 953.40M | 1.40B |
| Operating Cash Flow | 1.60B | 542.30M | 895.80M | 1.22B | 1.73B |
| Investing Cash Flow | -712.90M | 2.31B | 173.80M | 252.30M | -1.72B |
| Financing Cash Flow | -956.80M | -983.00M | -711.00M | -1.58B | -356.30M |
Edwards Lifesciences Technical Analysis
Negative
81.64
Price Trends
82.85
Negative
82.69
Negative
80.08
Positive
Market Momentum
0.77
Negative
47.19
Neutral
50.82
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 81.64 is above the 20-day moving average (MA) of 81.21, below the 50-day MA of 82.85, and above the 200-day MA of 80.08, indicating a neutral trend. The MACD of 0.77 indicates Negative momentum. The RSI at 47.19 is Neutral, neither overbought nor oversold. The STOCH value of 50.82 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
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $26.21B | 30.97 | 32.44% | ― | 14.21% | 5.66% | |
75 Outperform | $47.42B | 46.44 | 10.39% | ― | 0.19% | 65.58% | |
72 Outperform | $139.51B | 41.38 | 15.04% | 0.95% | 10.95% | -18.32% | |
68 Neutral | $105.88B | 48.91 | 12.60% | ― | 21.62% | 54.80% | |
65 Neutral | $190.38B | 33.55 | 12.89% | 1.88% | 6.37% | 142.39% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
46 Neutral | $1.59M | -14.23 | -476.74% | ― | -5.19% | -0.81% |
* Healthcare Sector Average
EW
Edwards Lifesciences
81.64
13.11
19.13%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.