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EW Edwards Lifesciences Corporation - Fundamental Analysis

NEUTRAL
EW Stock | Fundamental Analysis & Investment Insights
NYSE Healthcare Medical Devices
Current Price
$86.3
Analyst Target
$93.94
+8.9% Upside
52W High
$87.21
52W Low
$65.94

AI Analysis

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Confidence Score
72%
Analysis Accuracy
Edwards Lifesciences (EW) trades near its 52-week high at $86.30, reflecting strong recent price momentum (+30.4% 1Y, +18.3% 1M), supported by consistent revenue growth of 14.7% YoY and a solid track record of earnings beats over the past four quarters (avg. surprise: 9.24%). The company exhibits best-in-class profitability with a 78.2% gross margin and 27.4% operating margin, significantly above sector averages, while maintaining a fortress balance sheet with a Debt/Equity ratio of just 0.07 and a Current Ratio of 4.0. However, near-term earnings growth is deeply negative (-90.3% YoY), creating a dislocation between top-line strength and bottom-line performance, and insider selling worth $4.7M over the last six months raises caution. While analysts maintain a 'buy' recommendation with a $93.94 target implying 8.9% upside, valuation appears stretched relative to growth, particularly when compared to higher-growth peers like BNTX or capital-efficient leaders like ZTS.

Key Strengths

Revenue growth of 14.7% YoY significantly exceeds sector average of 10.24%
Exceptional profitability: 78.19% gross margin and 27.37% operating margin, both well above healthcare sector averages
Superior financial health with Debt/Equity of 0.07 vs. sector avg of 1.40 and Current Ratio of 4.0 indicating strong liquidity
Consistent earnings beat record: 3 out of last 4 quarters beat estimates with an average surprise of 9.24%
Attractive valuation relative to some peers despite high multiples—trades below COR's P/E of 45.47 and above ZTS's 20.34, but with better growth than ZTS

Key Risks

Severe earnings contraction: YoY earnings growth down 90.3%, raising concerns about cost structure or one-time charges
High valuation metrics: P/E of 37.85 and Forward P/E of 35.22 appear stretched given negative earnings growth
Insider selling pressure: $4.7M in insider sales over last 6 months with no buys, including CFO and multiple officers
Lack of dividend: zero payout policy may deter income-oriented investors despite strong cash generation
Near-term price resistance: trading just below 52-week high of $87.21 with limited technical room for upside
AI Fair Value Estimate
Based on comprehensive analysis
$92.5
+7.2% above current price

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