EDWARDS LIFESCIENCES CORPORATION (EW): what the price requires
At today's price, EDWARDS LIFESCIENCES CORPORATION (EW) is priced for today's economics sustained for ~6.1 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/EW
Headline
| Field | Value |
|---|---|
| Ticker | EW |
| Company | EDWARDS LIFESCIENCES CORPORATION |
| Current price | $92.08/sh |
| Composition | Transcatheter Aortic Valve Replacement 74% / Transcatheter Mitral and Tricuspid Therapies 9% / Surgical Structural Heart 17% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 12.2% |
| Operating margin today | 25.9% |
| Margin compression implied | -13.7pp |
| Must persist for | 6.1y |
| Multiple paid | 32x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 9% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~1.9 years.
How unusual the bet is: high
| Reference | Value |
|---|---|
| vs own history | +0.49σ |
| cohort percentile (of 112 peers) | 80 |
| sustained it ~6.1 years at this level | 26% |
| implied end-window share | 0% |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 4.22x | 5 | expensive |
| Earnings | 4.24x | 4 | expensive |
| Relative | 2.12x | 3 | expensive |
| Growth | 0.98x | 3 | justifies |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.
Per-Model Detail (n=15)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $70.06 | 1.31x | yes | FCF base $1.4B, growth 14% (input: historical growth), terminal g 4.0%, WACC 9.2%, 6yr projection |
| DCF Exit Multiple | Growth | $109.65 | 0.84x | yes | Exit EV/EBITDA: 35.3x / 37.3x / 39.3x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $62.03 | 1.48x | yes | P/E 31.43x (blended: static sector reference 24x + trailing (TTM) 49x), scenarios: 25.8x / 31.4x / 37.0x (bear / base = reference held flat / bull), EV/EBITDA 22.38x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $20.41 | 4.51x | yes | BV/sh $17.78, ROE (TTM) 10.6%, ke 9.3% |
| Two-Stage Excess Return | Asset | $21.81 | 4.22x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $93.57 | 0.98x | yes | Rev $6.3B, growth 14% (input: historical growth; tapered), Terminal P/S: 7.0x / 8.5x / 10.0x (bear / base = today's held flat / bull, cap 12x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $29.80 | 3.09x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $1.62B × (1−17%) / WACC 9.2% → EPV (no growth) |
| Residual Income | Asset | $22.07 | 4.17x | yes | BV $17.78 + 5yr PV of (ROE (TTM) 10.6% − Kₑ 9.3%) × BV; BV grows 6.9%/yr |
| Graham Number | Asset | $27.43 | 3.36x | yes | √(22.5 × EPS $1.88 × BVPS $17.78) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $41.24 | 2.23x | yes | EBITDA $1.39B × sector EV/EBITDA 16.0x |
| FCF Yield | Earnings | $23.28 | 3.96x | yes | FCF $1089.5M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $20.24 | 4.55x | yes | SBC-adj FCF $0.93B (FCF $1.09B − SBC $0.16B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $1.58 | 58.28x | yes | EPS $1.88 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) (excluded from median) |
| ROIC-Justified P/B | Asset | $8.94 | 10.30x | yes | BV $17.78 × (ROIC 4.6% / WACC 9.2%) |
| P/Sales Sector | Relative | $43.42 | 2.12x | yes | Revenue $6.30B × sector P/S 4.0x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $20.32 | 4.53x | yes | EPS $1.88 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net cash | $3.1b |
| Net debt / NOPAT (after-tax) | -2.33x (net cash) |
| Net debt / operating income (pre-tax) | -1.93x (net cash) |
| Share count CAGR (buyback) | -2.0% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
- Edwards is the structural-heart leader compounding on two engines: TAVR grew 14.4% to $1.20 billion in Q1, and the 10-K shows the newer TMTT business scaling from 4% of sales in 2023 to 9% in 2025 Sales of our TMTT products represented 9%, 7%, and 4% of our net sales in 2025, 2024, and 2023.
- The central risk is paying about 33 times operating income for a franchise whose largest segment is maturing: the price embeds growth at the self-funding ceiling for roughly five years, above what the company has delivered, and only the forward-growth methods reach it.
- Watch indication expansion and TMTT scale next: management raised full-year constant-currency sales growth guidance to 9% to 11%, so the coming quarters test whether the second franchise can carry the load as core TAVR growth normalizes.
Bull Case
Edwards funds its growth from a balance sheet that asks no one's permission. The company carries net cash of roughly $1.85 billion and no net debt, which for a medical-device maker is the freedom to spend heavily on clinical trials and pipeline without diluting holders or levering up. That matters because the bull case rests on a multi-year wave of clinical evidence, and clinical evidence is expensive. A net-cash position alongside a share count falling about 2% a year is management putting its own money where its conviction is: it is buying back stock while it invests, a combination only possible when the cash generation is real.
The growth engine is structural heart, where Edwards is the franchise leader. First-quarter sales grew 16.7% to $1.65 billion, with TAVR up 14.4% to $1.20 billion. The newer transcatheter mitral and tricuspid business is the next leg, and the 10-K shows its arc plainly: TMTT was 9% of net sales in 2025, up from 7% in 2024 and 4% in 2023 Sales of our TMTT products represented 9%, 7%, and 4% of our net sales in 2025, 2024, and 2023. A second large structural-heart market opening behind the first is what turns a single-product story into a durable compounder. The 10-K frames the moat as continuous product innovation backed by expanding clinical evidence and real-world outcomes product innovation, robust and expanding clinical evidence to support approvals and adoption.
The near-term momentum is strong enough that management raised guidance. Edwards lifted full-year constant-currency sales growth guidance to 9% to 11% from 8% to 10%, with total sales now expected at $6.5 to $6.9 billion. The bull thesis is that TAVR indication expansion into earlier-stage patients keeps the core growing double digits while TMTT scales into a second franchise, all funded internally. Only the forward-growth methods reach today's price, which is the market's way of saying it is paying for exactly this durable compounding, and the recent prints are delivering it.
Bear Case
The bear case turns on where Edwards sits in its product cycle versus where the price assumes it sits. TAVR, the franchise that is roughly three-quarters of the company, is a maturing market in its core indication, and the growth the price needs increasingly depends on expanding into new patient populations and on the still-young TMTT business carrying more of the load. At today's quote the market pays about 33 times company-wide operating income and embeds operating growth held at the company's self-funding ceiling for about five years, a pace the 10-K's own results show runs well above what Edwards has actually delivered. Pay a premium multiple on a franchise whose largest segment is maturing and you are betting the next indications and the second franchise replace the slowing core on schedule.
Competition is the named risk the price discounts. Structural heart is not a monopoly; the 10-K is explicit that the ability to market products even when innovation succeeds can be limited by competitive products and pricing, by barriers in patient detection and diagnosis, and by reimbursement competitive products and pricing, barriers in patient activation. It also flags industry consolidation, intellectual-property defense, and reimbursement reductions among its risks reductions in reimbursement levels • Industry consolidation. A rival device that takes share, a durability signal that disappoints, or a reimbursement cut in a major market would each pressure the growth rate the multiple assumes. The static valuation methods already say the price is rich: the asset-value and earnings-power lenses each put it around four times their central estimates, and the peer-multiple lens about twice.
The arithmetic of the premium is the crux. Because only the forward-growth methods reach the price, the entire valuation rests on the durable-compounding assumption holding. If TAVR growth fades toward the market's underlying rate and TMTT scales more slowly than hoped, the multiple compresses toward where the static methods sit, and there is a long way down. The balance sheet is a genuine cushion here, net cash and no debt mean no solvency risk to amplify a stumble, but a fortress balance sheet does not make a 33-times multiple cheap. The bear case is not that Edwards is a weak company; it is that a premium price on a franchise transitioning from one growth driver to the next leaves little margin if the transition is bumpy.
Valuation
The price is making a durability bet. Inverted, today's quote pays about 33 times company-wide operating income and embeds operating growth held at the company's self-funding ceiling for roughly five years, a pace that runs above what Edwards has historically delivered. The multiple sits at the top of the medical-device peer set. This is not a value situation; it is the market paying up for a structural-heart franchise it expects to keep compounding.
The methods make the bet legible. The asset-value and earnings-power lenses each put the price around four times their central estimates, and the peer-multiple lens about twice; only the forward-growth, cash-flow methods reach it. That pattern, where every static frame says rich and only the growth frame justifies the price, is the signature of a durability premium: the market is paying for compounding the backward-looking methods structurally cannot price. The reconciliation with the street is supportive, with the average analyst target near $96 sitting above today's price and a high end around $110, reflecting confidence in the TAVR expansion and the TMTT ramp.
Solvency is a clean strength and bounds the downside without flattering the multiple. Edwards holds net cash of roughly $1.85 billion and no net debt, and the share count has fallen about 2% a year on buybacks. There is no leverage to amplify a stumble, which is the right way to read a device maker funding heavy clinical investment: the balance sheet gives management room to invest through any near-term softness. What it does not do is shrink the gap between a price built on durable double-digit growth and a core franchise that is maturing. The decisive variable under the price is not the balance sheet but whether TAVR indication expansion and the TMTT franchise sustain the growth the multiple requires.
Catalysts
The Q1 2026 print on April 23 was the catalyst, beating expectations and prompting a guidance raise. Sales grew 16.7% to $1.65 billion, with TAVR up 14.4% to $1.20 billion and the TMTT business contributing $173 million across repair and replacement therapies. GAAP earnings were $0.66 per share. On the strength of the quarter, Edwards raised full-year constant-currency sales growth guidance to 9% to 11% from 8% to 10%, with total company sales now expected at $6.5 to $6.9 billion and TAVR sales of $4.7 to $5.0 billion.
Analyst sentiment turned more bullish around the franchise. TD Cowen upgraded Edwards to Buy and subsequently raised its target to $104, naming it the firm's top large-cap medical-technology pick on TAVR market-share gains, and the consensus target sits near $96 with a high around $110, above the current price. The drivers analysts cite are TAVR indication expansion into earlier-stage patients, Sapien durability data, and momentum in the TMTT replacement franchise. The watch items are the pace of TAVR share gains against competitors, the scale-up of TMTT, and any reimbursement or competitive developments in the major structural-heart markets.
Peer Cohorts (Per Segment, With Filing Citations)
Core business (reported)
- BSX (BOSTON SCIENTIFIC CORP)
- (no filing in the citation store)
- PEN (Penumbra, Inc)
- (no filing in the citation store)
- ISRG (Intuitive Surgical, Inc.)
- (no filing in the citation store)
- GMED (GLOBUS MEDICAL, INC.)
- (no filing in the citation store)
- MDT (Medtronic plc)
- (no filing in the citation store)
- SYK (STRYKER CORP)
- (no filing in the citation store)
- TFX (TELEFLEX INCORPORATED)
- (no filing in the citation store)
- MMSI (MERIT MEDICAL SYSTEMS INC)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Q1 2026 results, April 23 2026 · analyst consensus, 2026 · analyst notes, 2026