Yahoo Finance At US$102, Is Edwards Lifesciences Corporation (NYSE:EW) Worth Looking At Closely?
Today we're going to take a look at the well-established Edwards Lifesciences Corporation (NYSE:EW). The company's stock saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Today I will analyse the most recent data on Edwards Lifesciences’s outlook and valuation to see if the opportunity still exists.
See our latest analysis for Edwards Lifesciences
Is Edwards Lifesciences Still Cheap?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 14.71% above my intrinsic value, which means if you buy Edwards Lifesciences today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $89.16, there’s only an insignificant downside when the price falls to its real value. Is there another opportunity to buy low in the future? Since Edwards Lifesciences’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Can we expect growth from Edwards Lifesciences?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 34% over the next couple of years, the future seems bright for Edwards Lifesciences. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? EW’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on EW, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
If you want to dive deeper into Edwards Lifesciences, you'd also look into what risks it is currently facing. Case in point: We've spotted 1 warning sign for Edwards Lifesciences you should be aware of.
If you are no longer interested in Edwards Lifesciences, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
