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Why is Edwards Lifesciences (EW) a Strong Buy Stock Now?

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Edwards Lifesciences Corporation (EW - Free Report) , a specialized player in advanced cardiovascular diseases, is on a healthy growth trajectory, of late. The stock has rallied 19.5% over the last six months, ahead of the S&P 500’s 6.7% gain and the broader industry’s 10.8%.

The stock has a market cap of $23.9 billion. The company’s five-year historical growth rate is also favorable at 21.2% compared with the 9.5% increase of the broader industry and the S&P 500’ 2.8% gain.

With solid prospects, this Zacks Rank #1 (Strong Buy) stock is an attractive pick.

Headquartered in Irvine, CA, the company’s estimate revision trend for the current year has also been positive. In the past couple of months, 10 analysts moved north, with no movement in the opposite direction. The magnitude of estimate revision increased around 7.4% to $3.78 per share over the same time frame.

Let’s find out whether the recent positive trend is a sustainable one.

Edwards Lifesciences’ recently-reported second-quarter 2017 performance was quite promising with the company beating the Zacks Consensus Estimate for revenues and earnings. Also, the raised guidance for 2017 hints at brighter prospects. In fact, the outlook increase was backed by a strong performance of the company’s all three product lines.

The market is also upbeat about Edwards Lifesciences’ recent FDA approval of its INSPIRIS RESILIA aortic valve. This is the first-in-class among resilient heart valves.

The company also announced the receipt of the FDA approval for aortic and mitral valve-in-valve procedures using its SAPIEN 3 transcatheter heart valve.

We believe that the recent FDA approvals of several products have been boosting the investors’ confidence in the stock.

We are encouraged by Edwards Lifesciences’ focus on building a strong pipeline to further firm up its foothold across all operating businesses. The company has also witnessed growth in its emerging portfolio of mitral and tricuspid repair therapies.

Per the latest plans, the company’s new ultra system, including an on-balloon delivery system and next-generation sheath technology, is expected to be available in Europe from the second half of 2017.

Edwards Lifesciences is also on track to initiate the launch of Acumen HPI software suite with the new FloTrac IQ Smart Disposable and INSPIRIS RESILIA aortic valve in Europe and Japan by the end of 2017.

However, stiff competition, currency headwind and reimbursement issues are challenges for the stock ahead.

Other Key Picks

Other top-ranked medical stocks are Chemed Corporation (CHE - Free Report) , Amedisys, Inc. (AMED - Free Report) and IDEXX Laboratories, Inc. (IDXX - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Chemed has an expected earnings growth rate of 13.3% for the current year. The stock has gained 3.4% in the last six months.

Amedisys has a long-term expected earnings growth rate of 18.2%. The stock has gained 3.5% over the last six months.

IDEXX has a long-term expected earnings growth rate of 19.8%. The stock has gained around 3.7% over the last six months.

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