The market saw a number of declines this morning, but Edward Lifesciences (EW), one of my favorite healthcare stocks, was not one of them. EW shares gapped up after hours, following its strong fourth-quarter report. Let’s see whether EW is still a buy, or if that opportunity has passed.
Edwards Lifesciences Corp. is the world’s largest creator of artificial heart valves, including valves made from animal tissue and annuloplasty rings that repair damaged valves. Other major products include heart monitoring systems, and various types of surgical tubes and catheters. EW markets its products worldwide through a direct sales force and distributors.
And, as I’m writing this, EW shares are climbing after the heart valve developer beat expectations for the fourth quarter. According to management, the fourth-quarter results were driven by strong demand for its transcatheter aortic valve replacement therapy.
Compared with Q4 2014, worldwide sales climbed 8.6% to $671.1 million. Analysts were looking for $648.7 million in revenue, so Edwards Lifesciences posted a 3.5% sales surprise. Over the same period, net income rose 19.7% to $139.4 million, or $0.63 per share. This beat the $0.62 consensus EPS estimate by 1.6%.
Better yet, Edward Lifesciences expects to continue to go strong in FY 2016. Looking ahead to FY 2016, the company is targeting sales between $2.6 billion and $2.85 billion, and EPS between $2.57 and $2.67. This is well above the Street view of $2.40 EPS on $2.69 billion in revenue.
With results like this, it’s easy to see why EW bucked the market’s trend today—and I expect it to stay strong. EW is a B-rated Buy in Portfolio Grader.