Edwards Lifesciences Corp (NYSE: EW)

Sector: Healthcare Industry: Medical Devices CIK: 0001099800
Market Cap 45.66 Bn
P/B 4.47
P/E 33.38
P/S 7.76
ROIC (Qtr) 10.34
Div Yield % 0.00
Rev 1y % (Qtr) 14.67
Total Debt (Qtr) 700.30 Mn
Debt/Equity (Qtr) 0.07
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About

Investment thesis

Bull case

  • Strong operating cash flow of 1.02B provides robust 1.45x coverage of total debt 700.30M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 2.69B provide 100.21x coverage of short-term debt 26.80M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 10.37B provides 14.81x coverage of total debt 700.30M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 804.20M exceeds capital expenditure of 212.60M by 3.78x, indicating strong organic growth funding capability.
  • Operating cash flow of 1.02B provides exceptional 51.35x coverage of interest expenses 19.80M, showing strong debt service capability.

Bear case

  • Operating cash flow of 1.02B barely covers its investment activities of (1.09B), with a coverage ratio of -0.93, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (1.09B) provide weak support for R&D spending of 1.08B, which is -1.01x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 2.69B provide limited coverage of acquisition spending of (433.90M), which is -6.19x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Retained earnings of 14.15B provide limited buffer against comprehensive income items of (250.40M), which is -56.51x, indicating elevated exposure to market risks.
  • Operating cash flow of 1.02B shows concerning coverage of minority interest expenses of (5.40M), which is -188.30x, suggesting complex corporate structure risks.

Segments Breakdown of Revenue (2024)

Product and Service Breakdown of Revenue (2024)

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 3.25 2.13
EV to Cash from Ops. EV/CFO 42.38 2.75
EV to Debt EV to Debt 61.54 17.25
EV to EBIT EV/EBIT 26.54 2.89
EV to EBITDA EV/EBITDA 27.84 4.53
EV to Free Cash Flow [EV/FCF] EV/FCF 53.59 29.36
EV to Market Cap EV to Market Cap 0.94 25.09
EV to Revenue EV/Rev 7.32 32.80
Price to Book Value [P/B] P/B 4.47 4.73
Price to Earnings [P/E] P/E 33.38 -2.04
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 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) 81.99 196.93
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 26.92 -152.08
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -26.95 8,476.58
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -0.44
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -66.84 -792.16
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -2.71 3.79
EBIT Growth (1y) % EBIT 1y % (Qtr) -62.40 -301.80
EBT Growth (1y) % EBT 1y % (Qtr) -62.70 -121.44
EPS Growth (1y) % EPS 1y % (Qtr) -66.14 -87.51
FCF Growth (1y) % FCF 1y % (Qtr) 56.00 10.43
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 8.40 38.21
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.44 0.55
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 1.69 1.80
Current Ratio Curr Ratio (Qtr) 4.00 4.18
Debt to Equity Ratio Debt/Equity (Qtr) 0.07 1.20
Interest Cover Ratio Int Coverage (Qtr) 81.99 196.93
Times Interest Earned Times Interest Earned (Qtr) 81.99 196.93
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 30.70 -2,396.63
EBIT Margin % EBIT Margin % (Qtr) 27.59 -2,478.60
EBT Margin % EBT Margin % (Qtr) 27.26 -2,690.42
Gross Margin % Gross Margin % (Qtr) 78.20 30.80
Net Profit Margin % Net Margin % (Qtr) 23.20 -2,821.53