Here's Why You Should Buy Edwards Lifesciences Stock Now

Edwards Lifesciences (NYSE:EW) has been progressing well with core segmental growth and acquisitions. The continued adoption of the INSPIRIS RESILIA aortic valve has been a key growth driver.

In the past year, the company’s shares have outperformed the industry. The stock has rallied 19.6% against the industry’s 3.4% loss.

This $42.84-billion leader in cardiovascular treatment has earnings growth expectation of 14.8% for the next five years. Also, the company has a trailing-four quarter positive earnings surprise of 6.3%, on average.

Robust Q4 Earnings

Edwards Lifesciences exited the fourth quarter of 2019 with revenues beating its consensus estimate. Globally, TAVR procedures increased on strong therapy adoption across all geographies. We are also upbeat about strong sales growth within the Critical Care segment, driven by robust demand for the HemoSphere advance monitoring platform and continued adoption of Smart Recovery. The company continued benefiting from its CASMED acquisition. Moreover, a lifted 2020 EPS guidance raises investor optimism regarding the stock.

Let’s delve deeper into the other factors that substantiate the company’s Zacks Rank #2 (Buy).

Impressive CASMED Performance: The CASMED acquisition has been a key growth driver for Edwards Lifesciences’ Critical Care arm through the fourth quarter. CASMED’s FORE-SIGHT non-invasive cerebral oxygenation technology (which was integrated with Edwards Lifesciences HemoSphere advanced hemodynamic monitoring platform) recently received FDA approval. This is expected to expand Edwards Lifesciences’ reach in the smart monitoring technology market over the long haul.

Solid Potential of Surgical Heart Valve Therapy: Through the fourth quarter, Edwards Lifesciences registered strong top-line growth within its Surgical Structural Heart business led by increased adoption of premium high-value technologies and international strength. Despite headwinds, the INSPIRIS RESILIA aortic valve continued witnessing growth across all geographies, with notable usage in more active patients in the fourth quarter.

Continued Growth in TAVR: In the fourth quarter, sales at the TAVR product group grew 30% from the prior-year figure. In the United States, total TAVR procedures grew stronger than expected, at approximately 40%. Growth in the fourth quarter continued to be led by increase in TAVR treatments, following the strong PARTNER 3 evidence that paved the way for the recent FDA indication expansion of the company’s SAPIEN 3 and SAPIEN 3 Ultra systems. Backed by consistent strength in the TAVR uptake globally, Edwards Lifesciences expects underlying sales growth of 12-15% for 2020.

Estimate Trend

The company has been witnessing a positive estimate revision trend for 2020. Over the past 60 days, the Zacks Consensus Estimate for its earnings per share has inched up 1.1% to $6.26.

The Zacks Consensus Estimate for the company’s first-quarter 2020 revenues is pegged at $1.17 billion, suggesting 18.2% rise from the year-ago reported number.

Other Key Picks

A few other top-ranked stocks from the broader medical space are ResMed (NYSE:RMD) , Medtronic (NYSE:MDT) and Hill-Rom Holdings (NYSE:HRC) .

ResMed has an estimated long-term earnings growth rate of 12%. It currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Medtronic’s long-term earnings growth rate is projected at 7.4%. The company presently carries a Zacks Rank #2.

Hill-Rom’s long-term earnings growth rate is estimated at 11.1%. It currently carries a Zacks Rank #2.

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