Boston Scientific Corp (NYSE: BSX)

Sector: Healthcare Industry: Medical Devices CIK: 0000885725
Market Cap 112.80 Bn
P/B 4.65
P/E 38.92
P/S 5.62
ROIC (Qtr) 9.79
Div Yield % 0.00
Rev 1y % (Qtr) 15.90
Total Debt (Qtr) 11.44 Bn
Debt/Equity (Qtr) 0.47
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About

Boston Scientific Corporation (BSX) is a prominent player in the global medical device industry, known for its innovative solutions that aim to enhance patient health worldwide. The company operates in two main segments: MedSurg and Cardiovascular. MedSurg encompasses the Endoscopy, Urology, and Neuromodulation businesses, which focus on developing and manufacturing devices for diagnosing and treating a wide array of gastrointestinal, urological, and neurological conditions. On the other hand, the Cardiovascular segment includes Interventional Cardiology...

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Investment thesis

Bull case

  • Healthy cash reserves of 1.97B provide 6.57x coverage of short-term debt 299M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 4.53B provides strong 15.16x coverage of stock compensation 299M, indicating sustainable incentive practices.
  • Operating cash flow of 4.53B provides exceptional 12.99x coverage of interest expenses 349M, showing strong debt service capability.
  • Robust free cash flow of 3.66B exceeds capital expenditure of 876M by 4.18x, indicating strong organic growth funding capability.
  • Robust tangible asset base of 18.37B provides 5.48x coverage of working capital 3.35B, indicating strong operational backing.

Bear case

  • Operating cash flow of 4.53B barely covers its investment activities of (2.64B), with a coverage ratio of -1.72, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (2.64B) provide weak support for R&D spending of 2.05B, which is -1.29x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 1.97B provide limited coverage of acquisition spending of (1.59B), which is -1.23x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of 3.74B show weak coverage of depreciation charges of 1.37B, with a 2.73 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 3.66B represents just -7.45x of debt issuance (491M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer comparison

Companies in the Medical Devices
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ABT Abbott Laboratories 173.80 Bn 32.73 5.47 12.94 Bn
2 SYK Stryker Corp 141.15 Bn 43.48 5.62 15.86 Bn
3 MDT Medtronic plc 123.47 Bn 25.92 3.55 29.10 Bn
4 BSX Boston Scientific Corp 112.80 Bn 38.92 5.62 11.44 Bn
5 EW Edwards Lifesciences Corp 45.66 Bn 33.38 7.76 0.70 Bn
6 DXCM Dexcom Inc 27.52 Bn 32.91 5.90 1.34 Bn
7 STE STERIS plc 24.13 Bn 34.08 4.14 2.05 Bn
8 PODD Insulet Corp 17.33 Bn 70.38 6.87 1.01 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.82 2.13
EV to Cash from Ops. EV/CFO 27.16 2.75
EV to Debt EV to Debt 10.77 17.25
EV to EBIT EV/EBIT 32.92 2.89
EV to EBITDA EV/EBITDA 24.72 4.53
EV to Free Cash Flow [EV/FCF] EV/FCF 33.66 29.36
EV to Market Cap EV to Market Cap 1.09 25.09
EV to Revenue EV/Rev 6.13 32.80
Price to Book Value [P/B] P/B 4.65 4.73
Price to Earnings [P/E] P/E 38.92 -2.04
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 40.22
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 1.59
Dividend per Basic Share Div per Share (Qtr) 0.00 0.10
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 -0.37
Interest Coverage Int. cover (Qtr) 10.72 196.93
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -10.89 -152.08
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 374.64 8,476.58
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -0.44
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 52.14 -792.16
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 28.55 3.79
EBIT Growth (1y) % EBIT 1y % (Qtr) 44.12 -301.80
EBT Growth (1y) % EBT 1y % (Qtr) 48.08 -121.44
EPS Growth (1y) % EPS 1y % (Qtr) 55.56 -87.51
FCF Growth (1y) % FCF 1y % (Qtr) 38.30 10.43
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 20.57 38.21
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.46 0.55
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 0.36 1.80
Current Ratio Curr Ratio (Qtr) 1.62 4.18
Debt to Equity Ratio Debt/Equity (Qtr) 0.47 1.20
Interest Cover Ratio Int Coverage (Qtr) 10.72 196.93
Times Interest Earned Times Interest Earned (Qtr) 10.72 196.93
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 25.40 -2,396.63
EBIT Margin % EBIT Margin % (Qtr) 18.63 -2,478.60
EBT Margin % EBT Margin % (Qtr) 16.89 -2,690.42
Gross Margin % Gross Margin % (Qtr) 69.00 30.80
Net Profit Margin % Net Margin % (Qtr) 14.40 -2,821.53