What's behind Boston Scientific's Recent Stock Fall?

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Part 4
What's behind Boston Scientific's Recent Stock Fall? PART 4 OF 5

What BSX’s Stock Slump Could Indicate Right Now


Since the company’s news of the delay in relaunch of Lotus Edge on November 28, 2017, Boston Scientific (BSX) stock has fallen ~7.8%. But analysts still seem to be confident in the company’s long-term performance, as the majority of Wall Street analysts are bullish on the stock.

The stock’s lackluster performance over the past few days could suggest an opportunity for investors to invest in the company at a low price point, given the long-term growth potential of the stock. The stock registered a strong performance in fiscal 3Q17 and increased its fiscal 2017 guidance. (See Boston Scientific’s 3Q17 Earnings—Tops Sales Estimates for details.)

What BSX&#8217;s Stock Slump Could Indicate Right Now

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Boston Scientific fundamentals

Boston Scientific’s foward PE (price-to-earnings) ratio stands at 17.2x, while its PEG (PE-growth) ratio is ~2.7x. Peers Abbott Laboratories (ABT), Edwards Lifesciences (EW), and Medtronic (MDT) have PE ratios of 22.6x, 31.2x, and 17.2x, respectively.

Remember, the forward PE ratio calculates the price of a stock, divided by EPS (earnings per share) over the next 12 months, while the PEG ratio provides a better comparison estimate with other companies.

BSX’s forward return on equity ratio stands at 11.9%.

Strong business model, attractive product pipeline

Boston Scientific has a strong business model with an attractive product pipeline, and it has a leading position in a number of its businesses. The company has launched a number of big products, including the Resonate family of ICD devices and CRT-D systems. Boston Scientific has also been expanding its business through tuck-in acquisitions, the EndoChoice acquisition in September 2017 being the latest.

Investors looking for diversified exposure to Boston Scientific can consider investing in the Vanguard S&P 500 ETF (VOO), which has ~0.16% of its total holdings in BSX.


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