Edwards (EW) Rides on Innovation Despite Regulatory Issues

On Dec 26, we issued an updated research report on Edwards Lifesciences Corporation EW. The hugely untapped potential in the emerging markets aids the company. However, reimbursement issue deters growth. The stock currently has a Zacks Rank #3 (Hold).

Shares of this manufacturer of tissue heart valves and repair products used for replacing or repairing a patient's diseased or defective heart valve have outperformed its industry over the past six months. The stock has rallied 27.1% compared with the 6% rise of the industry.

Edwards Lifesciences has been seeing strong transcatheter valve sales in the domestic and overseas markets. In the last reported quarter, the company registered solid sales within its Critical Care division, driven by robust HemoSphere sales, primarily in the United States and Europe. The HemoSphere all-in-one monitoring platform (with FloTrac System and Acumen Hypotension Predictive Index) is gaining momentum from its sturdy rollout earlier this year, which saw a full-market launch.

The company is upbeat about getting enormous synergy benefits from its CASMED acquisition (completed in April). The buyout is fortifying Edwards Lifesciences’ position in smart monitoring technologies within the critical care platform. In Transcatheter Mitral and Tricuspid Therapies (TMTT), following the CE Mark, PASCAL is currently witnessing a powerful rollout in Europe.

Within Surgical Structural Heart, Edwards Lifesciences registered firm underlying growth on continued adoption of its high-value technologies and progress outside the United States. The company is currently witnessing a steady uptake of INSPIRIS RESILIA tissue valves across all regions, driven by increased demand among younger and more active patients.

However, spending on new European device regulations and manufacturing variances proved to be dampeners. This apart, a tough competition in the cardiac devices market is concerning.

Key Picks

Some better-ranked stocks from the broader medical space are Haemonetics Corporation HAE, National Vision Holdings, Inc. EYE and NuVasive, Inc NUVA.

Haemonetics has a Zacks Rank #2 (Buy) and a projected long-term earnings growth rate of 13.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

National Vision’s long-term earnings growth rate is estimated at 17.8%. The company currently carries a Zacks Rank of 2.

NuVasive’s long-term earnings growth rate is anticipated at 12.9%. It is currently a Zacks #2 Ranked player.

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