Medical device company Edwards Lifesciences (NYSE:EW) is scheduled to report first quarter earnings results in two weeks and the current estimates show a slight decline is expected. The current consensus estimate is for EPS of $0.48 and that's two cents below the $0.50 the company earned in the first quarter of 2020.
Edwards has seen earnings grow pretty consistently in recent years with an average growth rate of 14% per year over the last three years. Earnings growth did slow down in Q4 2020, but still managed to grow by 2% compared to the same period a year earlier. Second quarter results are expected to show growth of more than 50%, so the guidance that comes out with the first quarter report will be critical.
On the revenue side, the current consensus is $1.16 billion and that's 3.1% higher than last year’s $1.13 billion. Over the last three years revenue has grown by an average of 10% per year and it was up 1% in the fourth quarter. Analysts expect revenue to grow by 15.9% for 2021 and by 11.5% in 2022.
One area where Edwards does extremely well is in its profitability measurements. The return on equity is 26.9% and the profit margin is 30.6%.
Unfortunately the company doesn’t score as well when it comes to the valuation metrics. The trailing P/E is at 64.49 and the forward P/E is at 43.63. Even in an industry known for higher P/E ratios, those figures are higher than the industry average. They aren’t scary high, but they are a slight concern.
The overall fundamental picture for Edwards Lifesciences is pretty good. The profitability measurements are exceptional and the growth rates have been pretty good over the last few years. The outlook is strong and I don’t see the demand for heart-related devices dropping
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