Attractive P/E Ratio
Low Price-to-Sales Ratio
Strong Net Profit Margin
High Return on Equity
Low Debt Levels
Strong Liquidity Ratios
🏗️ Strong Business Foundation
🔍 Diverse Product Portfolio
🔧 High Gross Profit Margins
🚀 Growth Catalysts Ahead
🌍 International Expansion Opportunities
🩺 Innovation in Technology
High Price-to-Cash Flow Ratio
Elevated EV/EBITDA Ratio
Operating Profit Margin
Interest Coverage Ratio
⚠️ Regional Pressure Points
⏳ Uncertainty in Regulatory Approvals
Overall, Edwards is positioned well with a strong business foundation and diverse product offerings. Future growth prospects appear promising, driven by innovation and expansion into underpenetrated markets, though there are regional pressures and regulatory uncertainties that could impact performance.
Analysis Date: February 11, 2025
Last Updated: March 12, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$272.50
Current Market Price: $68.88
IV/P Ratio: 3.96x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
75.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for EW
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (9.80)
P/B ratio ≤ 1.5 (4.09)
Current ratio ≥ 2.0 (4.18x)
Long-term debt < Net current assets (0.14x)
Margin of safety (75.0%)
EW does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
The net profit margin of 72.93% indicates high profitability, suggesting that the company retains a significant portion of revenue as profit.
With a return on equity of 48.97%, the company effectively generates high returns for its shareholders.
The operating profit margin of 26.37% is respectable but indicates that a significant portion of revenue is consumed by operating costs.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
48.97%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
2.95%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
78.39%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
72.93%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
A debt-to-equity ratio of 0.07 indicates very low financial leverage, suggesting the company is less risky and has a solid capital structure.
The current ratio of 4.18 and quick ratio of 3.45 indicate that the company has ample liquidity to cover its short-term obligations.
An interest coverage ratio of 0.0 suggests that the company may not be generating enough earnings to cover its interest obligations, raising concerns about financial stability.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.07x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
4.18x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
Edwards has demonstrated strong financial performance with a 9% sales growth in 2024, reaching $5.4 billion in revenue. This aligns with their guidance and showcases resilience despite challenges in specific segments like TAVR. The strategic focus on structural heart technologies positions them well for sustainable growth.
The company’s diverse product offerings, particularly in TAVR, TMTT, and surgical segments, provide a robust platform for growth. The successful acquisition of companies such as JC Medical and JenaValve enhances their capabilities in addressing unmet patient needs, indicating a strategic expansion.
The company maintains strong gross profit margins, with an adjusted gross profit margin of 79% in Q4 2024. This reflects effective cost management and pricing strategies, contributing to overall profitability.
Despite overall strong performance, there were instances of regional pressures, particularly in Japan, where sales growth was slower than expected. This highlights potential vulnerability in specific markets that could affect future growth.
Looking forward to 2025, Edwards anticipates multiple catalysts for growth, including the expected FDA approval of early TAVR trials, which is projected to significantly enhance patient care and expand market opportunities.
Edwards sees considerable growth potential outside the U.S., particularly in regions where TAVR adoption is still low. This international focus is expected to drive long-term sales growth as awareness and treatment capabilities increase.
The company is heavily investing in R&D, with a focus on breakthrough technologies in structural heart diseases. This includes the anticipated SAPIEN M3 mitral replacement product, which is expected to enhance their product offering and market position.
The company faces potential regulatory uncertainties regarding upcoming NCD decisions for TMTT products, which may impact access to patients and overall sales growth if not favorable.