Edwards Lifesciences Corporation (NYSE:EW) received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$243 at one point, and dropping to the lows of US$187. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Edwards Lifesciences's current trading price of US$187 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Edwards Lifesciences’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What's the opportunity in Edwards Lifesciences?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 2.9% below my intrinsic value, which means if you buy Edwards Lifesciences today, you’d be paying a fair price for it. And if you believe that the stock is really worth $192.67, then there’s not much of an upside to gain from mispricing. Furthermore, Edwards Lifesciences’s low beta implies that the stock is less volatile than the wider market.
What does the future of Edwards Lifesciences look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by 65% over the next couple of years, the future seems bright for Edwards Lifesciences. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? It seems like the market has already priced in EW’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on EW, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Edwards Lifesciences. You can find everything you need to know about Edwards Lifesciences in the latest infographic research report. If you are no longer interested in Edwards Lifesciences, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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