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Edwards Lifesciences Near 52-Week High: Can It Sustain Momentum?

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Stock performance

Edwards Lifesciences (EW) is a leader in the artificial heart valve market. It has been expanding at a rapid pace recently amid its new product launches and innovative product pipeline. The stock closed at $113.30 on September 1, 2017. It has a 50-day moving average of $115.10 and a 200-day moving average of $107.80. The stock’s 52-week high of $81.10 was reported on October 10, 2016, and its 52-week low was $121.70 on December 1, 2016.

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In 2Q17, EW reported robust performance with growth in all its business segments. The results exceeded Wall Street analysts’ estimates, and the company made an upward revision to its 2017 guidance. You can see the company’s yearly revenues and forward estimates in the above graph. Since the release of the company’s 2Q17 results on July 26, 2017, EW stock has fallen approximately 2.2%.

Company fundamentals

Edwards Lifesciences has a strong portfolio of products and extensive market reach. The company faced some weakness in the last few quarters of 2016 but has rebounded in fiscal 2017. It expects to continue its growth momentum with the recent innovative product launches and approvals. Competitors in this market space are still lagging behind Edwards Lifesciences and could find it challenging to capture a sizable market share over the near term.

Comparisons with industry and market performances

Year-to-date (or YTD), Edwards Lifesciences has returned approximately 21.0%. The S&P 500 index, which represents the market, returned approximately 10.6% on a YTD basis. We can also compare the performance of Edwards Lifesciences with the medical device industry in the United States, which can be represented by the iShares US Medical Devices (IHI). IHI recorded YTD returns of approximately 24.7% as of September 3, 2017. The returns exceeded the market but underperformed the broader sector performance. However, over the last year, EW stock has fallen around 2.2%.

As of September 4, 2017, Boston Scientific (BSX), Abbott Laboratories (ABT), and Medtronic (MDT) have generated returns of 13.4%, 21.6%, and -8.3%, respectively, over the last year.

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