Edwards Lifesciences Corp (EW): A Deep Dive into Financial Metrics and Competitive Strengths
Edwards Lifesciences Corp (NYSE:EW) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at 70.19, Edwards Lifesciences Corp has witnessed a daily gain of 1.04%, marked against a three-month change of -21.34%. A thorough analysis, underlined by the GF Score, suggests that Edwards Lifesciences Corp is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
Edwards Lifesciences Corp has been assigned the following ranks:
Financial strength rank: 8/10
Profitability rank: 10/10
Growth rank: 10/10
GF Value rank: 10/10
Momentum rank: 5/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With high ranks in financial strength, profitability, growth, and GF value, and a moderate momentum rank, GuruFocus assigned Edwards Lifesciences Corp the GF Score of 97 out of 100, which signals the highest outperformance potential.
Understanding Edwards Lifesciences Corp Business
Spun off from Baxter International in 2000, Edwards Lifesciences Corp designs, manufactures, and markets a range of medical devices and equipment for advanced stages of structural heart disease. Its key products include surgical tissue heart valves, transcatheter valve technologies, surgical clips, catheters, and monitoring systems used to measure a patient's heart function during surgery. The firm derives about 55% of its total sales from outside the U.S. With a market cap of $42.67 billion and sales of $5.66 billion, the company has an operating margin of 31.51%.
Financial Strength Breakdown
According to the Financial Strength rating, Edwards Lifesciences Corp's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. With an Altman Z-Score of 12.7, Edwards Lifesciences Corp exhibits a strong defense against financial distress, highlighting its robust financial stability. With a favorable Debt-to-Revenue ratio of 0.12, Edwards Lifesciences Corp's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows Edwards Lifesciences Corp's impressive standing among its peers in generating profit. Edwards Lifesciences Corp Operating Margin has increased (15.37%) over the past five years, as shown by the following data: 2018: 28.81; 2019: 28.49; 2020: 30.02; 2021: 30.33; 2022: 33.24. Furthermore, Edwards Lifesciences Corp's Gross Margin has seen a consistent rise over the past five years, as evidenced by the data: 2018: 74.77; 2019: 74.37; 2020: 75.36; 2021: 76.13; 2022: 79.93. This trend underscores the company's growing proficiency in transforming revenue into profit. Edwards Lifesciences Corp's strong Predictability Rank of 4.5 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, Edwards Lifesciences Corp demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 8.1%, which outperforms better than 52.12% of 731 companies in the Medical Devices & Instruments industry. Moreover, Edwards Lifesciences Corp has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 15.5, and the rate over the past five years is 15.1. This trend accentuates the company's continued capability to drive growth.
Next Steps
Given the company's strong financial strength, profitability, and growth metrics, the GF Score highlights Edwards Lifesciences Corp's unparalleled position for potential outperformance. This analysis suggests that Edwards Lifesciences Corp is a promising investment opportunity for those seeking robust growth and financial stability. GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
This article first appeared on GuruFocus.
