A Look At Edwards Lifesciences (EW) Valuation As Market Sees 17.8% Undervaluation

Why Edwards Lifesciences (EW) is on investors’ radar

Edwards Lifesciences (EW) has drawn attention after a mixed period for the stock, with gains over the past year and past 3 years set against weaker month and year to date returns.

See our latest analysis for Edwards Lifesciences.

Recent trading suggests momentum has cooled a little, with a 1-day share price return of 1.09% and a 7-day gain of 5.15%. These are set against weaker 30-day and year to date share price returns, while 1-year and 3-year total shareholder returns remain positive.

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With Edwards Lifesciences trading at a discount to one analyst price target and an intrinsic value estimate, yet carrying a low value score of 2, you have to ask: is there hidden upside here, or is future growth already priced in?

Most Popular Narrative: 17.8% Undervalued

With Edwards Lifesciences closing at $79.78 versus a narrative fair value of $97.11, the most followed view in the market is that the shares are meaningfully underpriced based on long term fundamentals.

The expected approval of the early TAVR indication in the second quarter, along with policy and guideline changes in the U.S. and globally, represents a multiyear growth opportunity that could significantly enhance revenue streams in the future.

The planned launch of the transcatheter tricuspid valve EVOQUE in 2024 is anticipated to uniquely position Edwards to gain market share and increase revenues as it becomes the first company to develop and offer this therapy.

Read the complete narrative.

Want to understand why this fair value sits well above today’s price? The narrative leans on steady revenue expansion, resilient margins, and a richer future earnings multiple than the sector usually commands. Curious which specific growth rates and profitability assumptions have to line up to make $97.11 add up?

Result: Fair Value of $97.11 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, you also need to weigh tariff and reimbursement pressures, along with competitive TAVR headwinds in markets like Japan, which could challenge the potential for upside.

Find out about the key risks to this Edwards Lifesciences narrative.

Another Angle On Valuation

So far, the analysis suggests that Edwards Lifesciences appears 17.8% undervalued at a fair value estimate of $97.11. The simple P/E check, however, presents a different perspective, with the current P/E at 43.7x compared with the US Medical Equipment group at 30.5x and a fair ratio of 34.1x. Does that premium indicate quality, or does it point to crowding risk if sentiment cools?

See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

If this mix of potential upside and clear risks leaves you on the fence, do not wait to stress test the numbers and context yourself. Use 3 key rewards and 3 important warning signs to see how that balance looks in detail.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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