EDWARDS LIFESCIENCES CORP (EW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:EW - US28176E1082 - Common Stock
83.68 USD
-0.59 (-0.7%)
Overall EW gets a fundamental rating of 7 out of 10. We evaluated EW against 184 industry peers in the Health Care Equipment & Supplies industry. EW scores excellent points on both the profitability and health parts. This is a solid base for a good stock. EW is not valued too expensively and it also shows a decent growth rate. This makes EW very considerable for quality investing!
1. Profitability
1.1 Basic Checks
- In the past year EW was profitable.
- In the past year EW had a positive cash flow from operations.
- In the past 5 years EW has always been profitable.
- In the past 5 years EW always reported a positive cash flow from operatings.
1.2 Ratios
- With an excellent Return On Assets value of 10.31%, EW belongs to the best of the industry, outperforming 94.57% of the companies in the same industry.
- EW has a Return On Equity of 13.40%. This is amongst the best in the industry. EW outperforms 89.13% of its industry peers.
- With an excellent Return On Invested Capital value of 12.50%, EW belongs to the best of the industry, outperforming 92.93% of the companies in the same industry.
- EW had an Average Return On Invested Capital over the past 3 years of 15.82%. This is significantly above the industry average of 8.81%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.31% | ||
| ROE | 13.4% | ||
| ROIC | 12.5% |
ROA(3y)21.77%
ROA(5y)18.87%
ROE(3y)29.68%
ROE(5y)26.56%
ROIC(3y)15.82%
ROIC(5y)17.27%
1.3 Margins
- EW has a better Profit Margin (23.25%) than 95.11% of its industry peers.
- EW's Profit Margin has improved in the last couple of years.
- EW's Operating Margin of 27.73% is amongst the best of the industry. EW outperforms 96.20% of its industry peers.
- EW's Operating Margin has been stable in the last couple of years.
- EW has a better Gross Margin (78.19%) than 90.76% of its industry peers.
- EW's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 27.73% | ||
| PM (TTM) | 23.25% | ||
| GM | 78.19% |
OM growth 3Y-5.94%
OM growth 5Y-1.04%
PM growth 3Y38.76%
PM growth 5Y26.09%
GM growth 3Y1.43%
GM growth 5Y1.33%
2. Health
2.1 Basic Checks
- EW has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- EW has less shares outstanding than it did 1 year ago.
- EW has less shares outstanding than it did 5 years ago.
- The debt/assets ratio for EW has been reduced compared to a year ago.
2.2 Solvency
- An Altman-Z score of 12.34 indicates that EW is not in any danger for bankruptcy at the moment.
- EW has a better Altman-Z score (12.34) than 90.76% of its industry peers.
- EW has a debt to FCF ratio of 0.75. This is a very positive value and a sign of high solvency as it would only need 0.75 years to pay back of all of its debts.
- EW has a Debt to FCF ratio of 0.75. This is amongst the best in the industry. EW outperforms 90.76% of its industry peers.
- EW has a Debt/Equity ratio of 0.06. This is a healthy value indicating a solid balance between debt and equity.
- With a decent Debt to Equity ratio value of 0.06, EW is doing good in the industry, outperforming 67.39% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.06 | ||
| Debt/FCF | 0.75 | ||
| Altman-Z | 12.34 |
ROIC/WACC1.25
WACC10%
2.3 Liquidity
- EW has a Current Ratio of 4.00. This indicates that EW is financially healthy and has no problem in meeting its short term obligations.
- EW has a better Current ratio (4.00) than 69.02% of its industry peers.
- A Quick Ratio of 3.29 indicates that EW has no problem at all paying its short term obligations.
- Looking at the Quick ratio, with a value of 3.29, EW is in the better half of the industry, outperforming 69.02% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4 | ||
| Quick Ratio | 3.29 |
3. Growth
3.1 Past
- EW shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -3.75%.
- Measured over the past 5 years, EW shows a small growth in Earnings Per Share. The EPS has been growing by 7.13% on average per year.
- EW shows a small growth in Revenue. In the last year, the Revenue has grown by 4.67%.
- Measured over the past years, EW shows a small growth in Revenue. The Revenue has been growing by 4.58% on average per year.
EPS 1Y (TTM)-3.75%
EPS 3Y5.52%
EPS 5Y7.13%
EPS Q2Q%0%
Revenue 1Y (TTM)4.67%
Revenue growth 3Y1.3%
Revenue growth 5Y4.58%
Sales Q2Q%14.67%
3.2 Future
- Based on estimates for the next years, EW will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.40% on average per year.
- The Revenue is expected to grow by 8.47% on average over the next years. This is quite good.
EPS Next Y1.27%
EPS Next 2Y6.3%
EPS Next 3Y7.79%
EPS Next 5Y9.4%
Revenue Next Year4.63%
Revenue Next 2Y7.15%
Revenue Next 3Y8.06%
Revenue Next 5Y8.47%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- EW is valuated quite expensively with a Price/Earnings ratio of 32.56.
- 73.37% of the companies in the same industry are more expensive than EW, based on the Price/Earnings ratio.
- When comparing the Price/Earnings ratio of EW to the average of the S&P500 Index (27.25), we can say EW is valued inline with the index average.
- The Price/Forward Earnings ratio is 28.27, which means the current valuation is very expensive for EW.
- EW's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. EW is cheaper than 73.91% of the companies in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 25.98. EW is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.56 | ||
| Fwd PE | 28.27 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, EW is valued a bit cheaper than 72.83% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, EW is valued a bit cheaper than the industry average as 71.20% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 60.73 | ||
| EV/EBITDA | 24.89 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- The excellent profitability rating of EW may justify a higher PE ratio.
PEG (NY)25.71
PEG (5Y)4.57
EPS Next 2Y6.3%
EPS Next 3Y7.79%
5. Dividend
5.1 Amount
- EW does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
EDWARDS LIFESCIENCES CORP / EW FAQ
What is the fundamental rating for EW stock?
ChartMill assigns a fundamental rating of 7 / 10 to EW.
What is the valuation status for EW stock?
ChartMill assigns a valuation rating of 4 / 10 to EDWARDS LIFESCIENCES CORP (EW). This can be considered as Fairly Valued.
How profitable is EDWARDS LIFESCIENCES CORP (EW) stock?
EDWARDS LIFESCIENCES CORP (EW) has a profitability rating of 9 / 10.
What is the earnings growth outlook for EDWARDS LIFESCIENCES CORP?
The Earnings per Share (EPS) of EDWARDS LIFESCIENCES CORP (EW) is expected to grow by 1.27% in the next year.