Edwards Lifesciences' Pipeline Strong Amid Rising Expenses

On Nov 27, we issued an updated research report on Edwards Lifesciences Corporation (NYSE:EW) . The stock carries a Zacks Rank #3 (Hold).

Edwards Lifesciences’ third-quarter 2017 performance was disappointing with revenues and earnings lagging the respective Zacks Consensus Estimate. Natural disasters impacted third-quarter sales to the tune of $2 million. Also, higher operating expenses continue to be a drag. The stock’s valuation remains stretched on huge investments related to continuous launch and promotion of products. Stiff competition, currency headwind and reimbursement issues are other challenges.

Over the last three months, this leading molecular diagnostic company has been trading above the broader industry. The stock has lost 1.7% against the broader industry’s 6.5% gain during the period.

On a positive note, in the third quarter, the company reported Transcatheter Heart Valve Therapy (“THVT”) sales growth of 17.3% over the prior-year quarter. This upside was led by a strong continued adoption of the therapy across all geographical regions. Per management, THVT adoption in the quarter grew consistently on robust performance of its SAPIEN 3 valve.

Edwards Lifesciences Corporation Price

Edwards Lifesciences Corporation Price | Edwards Lifesciences Corporation Quote

We are also encouraged by the company’s long-term growth strategies and its recent progress in technology pipeline. As far as transcatheter heart valve (THV) is concerned, Edwards Lifesciences expects to maintain its leadership position in the global Transcatheter Aortic Valve Replacement (TAVR) market.

Also, the company’s focus on building its pipeline to strengthen foothold across all operating businesses bodes well. Edwards Lifesciences has also witnessed growth in its emerging portfolio of mitral and tricuspid repair therapies.

Key Picks

A few better-ranked stocks in the broader medical sector are PetMed Express, Inc. (NASDAQ:PETS) , Myriad Genetics, Inc. (NASDAQ:MYGN) and Luminex Corporation (NASDAQ:LMNX) . While PetMed and Myriad sport a Zacks Rank #1 (Strong Buy), Luminex carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

PetMed has a long-term expected earnings growth rate of 10%. The stock has soared roughly 76.8% in a year.

Myriad Genetics has a long-term expected earnings growth rate of 15%. The stock has gained 12.5% over the last three months.

Luminexhas a long-term expected earnings growth rate of 16.3%. The stock has rallied 15.5% over the last three months.

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