雅虎香港財經 Here's Why You Should Retain Edward Lifesciences (EW) for Now
Edwards Lifesciences Corporation EW is well poised for growth in coming quarters, backed by the strength of a differentiated portfolio of advanced therapies. The company continues to witness strong performance of its SAPIEN 3 Ultra RESILIA platform, the leading platform in the United States and Japan.
However, stiff rivalry and foreign exchange headwinds are a concern for EW’s business.
In the past six months, this Zacks Rank #3 (Hold) stock has gained 30.2% compared with an 18.1% rise of the industry and 16.9% growth of the S&P 500 composite.
The renowned global medical device company has a market capitalization of $52.70 billion. Edward Lifesciences’ earnings surpassed estimates in two of the trailing four quarters and broke even in two, delivering an average surprise of 0.80%.
Let’s delve deeper.
Upsides
Surgical Structural Heart, a Promising Business: Edwards Lifesciences expects to maintain its leadership position in the global TAVR market through an increased focus on expanding patient access by actively leveraging current valve platforms for additional indications.
While the company continues to expand the overall body of RESILIA technology evidence, Edwards Lifesciences now expects U.S. and Canada enrollment of its MOMENTIS clinical study to be completed in second-quarter 2024, a year ahead of previous expectations. The study will continue to open new sites in Europe and Latin America, with global enrollment continuing into 2025.
TAVR Holds Potential: In the past few quarters, TAVR sales have been driven by the strong performance of the Edwards SAPIEN 3 Ultra valve in the United States, Europe and the Rest of the World, the Edwards SAPIEN 3 Ultra RESILIA valve in the United States and the Edwards SAPIEN 3 in Japan. The business ended first-quarter 2024 with 8% year-over-year growth. The said period marked the first quarter of TAVR sales exceeding $1 billion, an exciting milestone for Edwards Lifesciences and a testament to clinician confidence in the company’s leading technology.
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Strong Solvency and Capital Structure: Edwards Lifesciences has a solid balance sheet position. The company exited the first quarter of 2024 with cash and cash equivalents and short-term investments of $1.69 billion compared with $1.64 billion recorded at the end of fourth-quarter 2023, with no near-term debt payable. Long-term debt was $597.2 million at the end of the first quarter, slightly up from $597 million at the end of the fourth quarter.
Downsides
Foreign Exchange Headwinds: Foreign exchange is a major headwind for EW 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 are apprehensive about the significant challenges Edward Lifesciences had to face owing to unfavorable foreign currency impact that has been affecting the company’s gross margin in the past few quarters.
Competitive Landscape: The medical technology industry is highly competitive, with the presence of several competent players. In TAVR, the company’s primary competitors include Medtronic, Abbott Laboratories and Boston Scientific Corporation. Within TMTT, apart from Abbott, there are a considerable number of large and small companies with development efforts in these fields.
Estimate Trend
The Zacks Consensus Estimate for Edwards Lifesciences’ 2024 earnings per share (EPS) has moved up from $2.76 to $2.77 in the past 90 days.
The Zacks Consensus Estimate for the company’s 2024 revenues is pegged at $6.56 billion. This suggests a 9.3% rise from the year-ago reported number.
Key Picks
Some better-ranked stocks from the broader medical space are Medpace MEDP, ResMed RMD and Encompass Health Corporation EHC.
Medpace, sporting a Zacks Rank #1 (Strong Buy), reported first-quarter 2024 EPS of $3.20, beating the Zacks Consensus Estimate by 30.6%. Revenues of $511 million increased 17.7% from last year’s comparable figure. You can see the complete list of today’s Zacks #1 Rank stocks here.
Medpace has an estimated 2024 earnings growth rate of 26.5% compared with the industry’s 12.3%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 12.8%.
ResMed, sporting a Zacks Rank #2, reported first-quarter 2024 EPS of $2.13, which topped the Zacks Consensus Estimate by 10.9%. Revenues of $1.20 billion surpassed the Zacks Consensus Estimate by 1.9%.
RMD has an estimated fiscal 2024 earnings growth rate of 17.9% compared with the industry’s 15.7%. In each of the trailing four quarters, the company delivered an average earnings surprise of 2.8%.
Encompass Health, carrying a Zacks Rank #2, reported first-quarter 2024 adjusted EPS of $1.12, which surpassed the Zacks Consensus Estimate by 20.4%. Net operating revenues of $1.3 billion topped the Zacks Consensus Estimate by 3.6%.
EHC has an estimated long-term earnings growth rate of 15.6% compared with the industry’s 11.7% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 18.7%.
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Edwards Lifesciences Corporation (EW) : Free Stock Analysis Report
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