Edwards Lifesciences Corp (EW) Stock Analysis
Edwards Lifesciences Corp (EW) Stock Analysis
Analysis from 10-Q filed 2025-11-05. Data as of Q4 2025.
Overall Grade: F (Concerning)
Edwards Lifesciences Corp faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | 9.7% | Near cost of capital |
| FCF Margin | 22.0% | Strong cash generation |
| Debt/Equity | 0.1x | Conservative leverage |
Investment Thesis: Healthy free cash flow margin of 22.0% provides financial flexibility for growth and shareholder returns.
Explore Edwards Lifesciences Corp: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: Edwards Lifesciences Corp earns 9.7% ROIC, Top 50% in Healthcare
Edwards Lifesciences Corp's trailing-twelve-month ROIC of 9.7% ranks Top 50% in Healthcare companies (sector median: -3.3%), driven by NOPAT margin of 17.3% combined with asset turnover of 0.5x. Source: 10-Q filed 2025-11-05. Gross margin of 78.0% with operating margin at 20.8% reflects strong pricing power.
| Metric | EW | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 9.7% | Adequate | Above sector median of -3.3% |
| Return on Equity (ROE) | 10.5% | Adequate | Moderate equity returns |
| Gross Margin | 78.0% | Excellent | Strong pricing power |
| Operating Margin | 20.8% | Excellent | Efficient operations |
Cash Flow: Edwards Lifesciences Corp generates $1.3B FCF at 22.0% margin, positive NaN/8 quarters
Edwards Lifesciences Corp generated $1.3B in free cash flow (TTM), a 22.0% FCF margin, a margin that ranks Top 5% in Healthcare. Operating cash flow exceeds net income by 1.5x, indicating high earnings quality. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-11-05.
| Metric | EW | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 22.0% | Excellent | Excellent cash conversion |
| Free Cash Flow (TTM) | $1.3B | Good | Positive cash generation |
| OCF/Net Income | 1.5x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: Edwards Lifesciences Corp at 0.1x leverage
Edwards Lifesciences Corp's debt-to-equity ratio of 0.1x reflects conservative leverage. Net cash position of $3.6B provides financial flexibility. Source: 10-Q filed 2025-11-05.
| Metric | EW | Rating | Context |
|---|---|---|---|
| Debt to Equity | 0.1x | Excellent | Conservative capital structure |
| Net Cash Position | $3.6B | Excellent | Net cash positive |
Valuation: Edwards Lifesciences Corp trades at 46.3x earnings
Edwards Lifesciences Corp trades at a P/E of 46.3x. Free cash flow yield of 2.7% reflects market expectations for growth.
| Metric | EW | Rating | Context |
|---|---|---|---|
| P/E Ratio | 46.3x | Adequate | Premium valuation |
| EV/Sales | 7.7x | Adequate | Growth premium priced in |
| FCF Yield | 2.7% | Adequate | Lower cash yield |
Capital Allocation: Edwards Lifesciences Corp returns 1.8% shareholder yield
Edwards Lifesciences Corp's total shareholder yield is 1.8% (dividends + buybacks 1.8%). Source: 10-Q filed 2025-11-05.
| Metric | EW | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 1.8% | Adequate | Dividend + buyback yield combined |
| Buyback Yield | 1.8% | Adequate | Minimal buyback activity |
| Total Capital Returned (TTM) | $893.4M | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 9.7% | Top 50% | - |
| Free Cash Flow Margin | 22.0% | Top 5% | - |
| Gross Margin | 78.0% | Top 50% | 1.2x above |
| Operating Margin | 20.8% | Top 25% | 10.9x above |
| Return on Equity (ROE) | 10.5% | Top 50% | - |
| P/E Ratio | 46.3x | N/A | - |
Financial Scorecard
| Metric | EW | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 9.7% | Adequate | Top 50% of sector (median: -3.3%) |
| Free Cash Flow Margin | 22.0% | Excellent | Top 5% of sector (median: 0.0%) |
| Gross Margin | 78.0% | Excellent | Top 50% of sector (median: 64.0%) |
| Debt to Equity Ratio | 5.8% | Excellent | Conservative capital structure |
| P/E Ratio (Price-to-Earnings) | 46.3x | Adequate | High expectations priced in |
| Free Cash Flow Yield | 2.7% | Warning | Growth-focused valuation |
Frequently Asked Questions
Q: What is Edwards Lifesciences Corp's Return on Invested Capital (ROIC)?
Edwards Lifesciences Corp (EW) has a trailing twelve-month Return on Invested Capital (ROIC) of 9.7%. This compares above the sector median of -3.3%. An ROIC near 8-12% is approximately the cost of capital for most companies.
Q: What is Edwards Lifesciences Corp's Free Cash Flow Margin?
Edwards Lifesciences Corp (EW) has a free cash flow margin of 22.0%, generating $1.3 billion in free cash flow over the trailing twelve months. A FCF margin above 20% indicates excellent cash conversion and a high-quality business model.
Q: Is Edwards Lifesciences Corp stock overvalued or undervalued?
Edwards Lifesciences Corp (EW) trades at a P/E ratio of 46.3x, which is above the sector median of N/A. The EV/Sales multiple is 7.7x. Free cash flow yield is 2.7%, reflecting growth expectations priced into the stock.
Q: What is Edwards Lifesciences Corp's revenue and earnings growth?
Edwards Lifesciences Corp (EW) grew revenue by 11.5% year-over-year. Earnings per share decreased by 73.9% compared to the prior year. Solid growth above 10% suggests healthy business momentum.
Q: Is Edwards Lifesciences Corp buying back stock?
Edwards Lifesciences Corp (EW) repurchased $893.4 million of stock over the trailing twelve months. This represents a buyback yield of 1.8%.
Q: How does Edwards Lifesciences Corp compare to competitors in Healthcare?
Compared to other companies in Healthcare, Edwards Lifesciences Corp (EW) shows: ROIC of 9.7% is above the sector median of -3.3% (Top 27%). FCF margin of 22.0% exceeds the sector median of 0.0% (Top 0% of sector). Gross margin at 78.0% is 14 percentage points higher than sector peers. These rankings are based on MetricDuck's analysis of all Healthcare companies with available SEC filings.
Q: What warning signs should I watch for with Edwards Lifesciences Corp?
Investors in Edwards Lifesciences Corp (EW) should monitor these potential warning signs: 1) ROIC has been declining, potentially signaling deteriorating competitive position. Regular monitoring of SEC filings and quarterly trends is recommended.
Data Source: Data sourced from 10-Q filed 2025-11-05. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.