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Edwards Lifesciences (EW) Rides on Innovation Amid Rising Costs
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Edwards Lifesciences (EW - Free Report) gains from the huge untapped potential in emerging markets. The company’s bullish long-term growth strategy buoys optimism on the stock. Yet, stiff competition in Edwards Lifesciences’ TAVR business continues to ail the company. Persistent forex woes also do not bode well. The company currently carries a Zacks Rank #3 (Hold).
Edwards Lifesciences registered year-over-year growth in both earnings and revenues during the third quarter. The company registered strong underlying growth across all product groups. However, a slower-than-expected recovery of the U.S. hospital staffing trend and COVID-19 restrictions in Japan marred growth. Adjusted EPS grew despite aggressive investment in R&D and commercial infrastructure to support new therapies.
Critical Care sales were up 3% on an underlying basis in the third quarter of 2022. The sales growth was driven by increased adoption of the broad portfolio of smart recovery products, including FloTrac and ClearSight sensors with unique hypotension prediction index algorithm. Additionally, demand for the HemoSphere monitoring platform remains strong.
Edwards Lifesciences expects full-year 2022 underlying sales growth in the mid-single-digit range on the back of strength in demand for products used in more intense surgeries.
In the third quarter, the company’s Surgical Structural Heart sales improved 8.2% on an underlying basis. The company continues to witness strong momentum of the RESILIA portfolio globally as it bolsters the overall body of evidence, including four abstracts recently presented at the European Association for Cardiothoracic Surgery Annual Meeting in Milan.
Edwards Lifesciences expects 2022 underlying sales growth in the mid-single-digit range, driven by market growth and the adoption of premium technologies.
On the flip side, Edwards Lifesciences’ revenues and earnings per share for the third quarter missed the respective Zacks Consensus Estimate. U.S. TAVR sales were impacted by slower-than-expected improvement in hospital staffing and temporary contrast agent shortages. Selling, general and administrative expenses rose 3.5% year over year, driven by the resumption of in-person commercial activities. These developments drove operating costs by 10%, building pressure on the company’s bottom line.
The choppy market conditions due to the continued foreign exchange impact and COVID-related hospital staffing issues are concerning. The company lowered its sales outlook for full-year 2022, taking these macroeconomic challenges into account.
In the past year, Edwards Lifesciences has underperformed its industry. The stock has lost 39.8% compared with the 23.5% fall of the industry.
Key Picks
A few better-ranked stocks in the broader medical space that investors can consider are ShockWave Medical, Inc. , Orthofix Medical Inc. (OFIX - Free Report) and Merit Medical System (MMSI - Free Report) .
ShockWave Medical, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 33.1% for 2023. The company’s earnings surpassed estimates in all the trailing four quarters, the average beat being 180.1%.
ShockWave Medical has outperformed its industry in the past year. SWAV has gained 35% against the industry’s 32.6% fall in the past year.
Orthofix Medical, currently carrying a Zacks Rank #1 (Strong Buy), reported third-quarter 2022 adjusted EPS of 13 cents, which beat the Zacks Consensus Estimate by a stupendous 550%. Revenues of $114 million outpaced the consensus mark by 2.7%.
Orthofix Medical has an estimated next year growth rate of 58.97%. OFIX’s earnings surpassed estimates in the trailing three quarters and missed in one, the average being 129.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Merit Medical, currently carrying a Zacks Rank of 2, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.
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Edwards Lifesciences (EW) Rides on Innovation Amid Rising Costs
Edwards Lifesciences (EW - Free Report) gains from the huge untapped potential in emerging markets. The company’s bullish long-term growth strategy buoys optimism on the stock. Yet, stiff competition in Edwards Lifesciences’ TAVR business continues to ail the company. Persistent forex woes also do not bode well. The company currently carries a Zacks Rank #3 (Hold).
Edwards Lifesciences registered year-over-year growth in both earnings and revenues during the third quarter. The company registered strong underlying growth across all product groups. However, a slower-than-expected recovery of the U.S. hospital staffing trend and COVID-19 restrictions in Japan marred growth. Adjusted EPS grew despite aggressive investment in R&D and commercial infrastructure to support new therapies.
Critical Care sales were up 3% on an underlying basis in the third quarter of 2022. The sales growth was driven by increased adoption of the broad portfolio of smart recovery products, including FloTrac and ClearSight sensors with unique hypotension prediction index algorithm. Additionally, demand for the HemoSphere monitoring platform remains strong.
Edwards Lifesciences Corporation Price
Edwards Lifesciences Corporation price | Edwards Lifesciences Corporation Quote
Edwards Lifesciences expects full-year 2022 underlying sales growth in the mid-single-digit range on the back of strength in demand for products used in more intense surgeries.
In the third quarter, the company’s Surgical Structural Heart sales improved 8.2% on an underlying basis. The company continues to witness strong momentum of the RESILIA portfolio globally as it bolsters the overall body of evidence, including four abstracts recently presented at the European Association for Cardiothoracic Surgery Annual Meeting in Milan.
Edwards Lifesciences expects 2022 underlying sales growth in the mid-single-digit range, driven by market growth and the adoption of premium technologies.
On the flip side, Edwards Lifesciences’ revenues and earnings per share for the third quarter missed the respective Zacks Consensus Estimate. U.S. TAVR sales were impacted by slower-than-expected improvement in hospital staffing and temporary contrast agent shortages. Selling, general and administrative expenses rose 3.5% year over year, driven by the resumption of in-person commercial activities. These developments drove operating costs by 10%, building pressure on the company’s bottom line.
The choppy market conditions due to the continued foreign exchange impact and COVID-related hospital staffing issues are concerning. The company lowered its sales outlook for full-year 2022, taking these macroeconomic challenges into account.
In the past year, Edwards Lifesciences has underperformed its industry. The stock has lost 39.8% compared with the 23.5% fall of the industry.
Key Picks
A few better-ranked stocks in the broader medical space that investors can consider are ShockWave Medical, Inc. , Orthofix Medical Inc. (OFIX - Free Report) and Merit Medical System (MMSI - Free Report) .
ShockWave Medical, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 33.1% for 2023. The company’s earnings surpassed estimates in all the trailing four quarters, the average beat being 180.1%.
ShockWave Medical has outperformed its industry in the past year. SWAV has gained 35% against the industry’s 32.6% fall in the past year.
Orthofix Medical, currently carrying a Zacks Rank #1 (Strong Buy), reported third-quarter 2022 adjusted EPS of 13 cents, which beat the Zacks Consensus Estimate by a stupendous 550%. Revenues of $114 million outpaced the consensus mark by 2.7%.
Orthofix Medical has an estimated next year growth rate of 58.97%. OFIX’s earnings surpassed estimates in the trailing three quarters and missed in one, the average being 129.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Merit Medical, currently carrying a Zacks Rank of 2, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.