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Guidance Will Be Key When Edwards Lifesciences Reports Q1 Earnings

Rick Pendergraft profile picture
Rick Pendergraft


  • Edwards Lifesciences has shown consistent earnings and revenue growth in the last few years and it has strong profitability measurements.
  • The company is scheduled to report first quarter earnings results on April 20 with earnings expected to decline slightly from Q1 2020.
  • Sentiment toward the stock is mixed and expectations appear to be somewhat low at this point. From a contrarian perspective, these are good things.
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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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This article was written by

Rick Pendergraft profile picture
Rick Pendergraft is a Senior Editor on the Opinion & Analysis team at Seeking Alpha. Prior to joining Seeking Alpha, he studied, traded, analyzed, and wrote about the investment markets for over 30 years. He has worked for some of the largest financial publishers in the world and he has been quoted in the Wall Street Journal, USA Today, the New York Times and the Washington Post. In addition, he has been interviewed on Bloomberg, CNBC and Fox Business News. After starting college as an education major, wanting to teach economics, Rick eventually changed to majoring in Economics and received a Bachelor of Science in Economics from Wright State University. His desire to inform and educate people is at the heart of his writing.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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