Now, let’s take a look at Edwards Lifesciences’ growth-adjusted valuation multiple—the PEG (price-to-earnings growth) ratio. The PEG ratio is a growth-adjusted valuation multiple that’s often used to compare companies in different industries with various growth profiles. On September 28, Edwards Lifesciences had a 12-month forward PEG multiple of ~2.02x.
On September 28, Edwards Lifesciences’ peers Abbott Laboratories (ABT), Boston Scientific (BSX), and Medtronic (MDT) had forward PE multiples of 23.1x, 25.2x, and 18.7x, respectively. They had forward PEG multiples of 1.8x, 2.2x, and 2.5x, respectively. The multiples show that Edwards Lifesciences’ forward PEG ratio is in line with its peers. However, the company has a higher forward PE multiple. The higher multiple shows that the company’s high forward PE multiple might be more representative of its future growth potential rather than its overvaluation.