EW - Embedded Expectations Analysis - 2021 01 07
Edwards Lifesciences Corporation (EW:USA) trades near historical highs relative to UAFRS-based (Uniform) earnings, with a 48.5x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management appears concerned about their ability to sustain overall growth, TAVR adoption, and TMTT trialsSpecifically, management may lack confidence in their ability to introduce the transcatheter aortic valve replacement (TAVR) therapy through their training program and sustain TAVR growth amidst the pandemic. Furthermore, they may have concerns about their conversations with the hospitals regarding TAVR, choppiness in growth, and continued FX headwinds. Management may also lack confidence in their ability to sustain their free cash flow and operating margins. Finally, they may be exaggerating their ability to return to pre-coronavirus levels for their transcatheter mitral and tricuspid therapies (TMTT) trials, and they may have concerns about the potential of TMTT
Edwards Lifesciences is engaged in patient-focused medical for structural heart disease, as well as critical care and surgical monitoring. The company is a manufacturer of heart valve systems and repair products used to replace or repair a patient's diseased or defective heart valve. The company is also engaged in hemodynamic and noninvasive brain and tissue oxygenation monitoring systems used to measure a patient's cardiovascular function in the hospital setting. The company's products and technologies are categorized into four main areas: Transcatheter Aortic Valve Replacement, Transcatheter Mitral and Tricuspid Therapies, Surgical Structural Heart, and Critical Care.
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