Edwards Lifesciences (EW) has been a growth star in the med-tech space for a while now, and with good reason, as the company’s leading transcatheter aortic valve replacement (or TAVR) offerings have driven double-digit growth for more than a decade, even with some bumps along the way. Making that growth all the more impressive is that it has come despite serious competition from companies like Medtronic (MDT), Boston Scientific (BSX), and Abbott (ABT) (to varying extents).
There has been a persistent debate as to the sustainability of growth in the TAVR market, and the bulls have a rather long winning streak there. Likewise, there have been fierce debates as to whether the $3 billion-plus opportunity expected in mitral and tricuspid repair/replacement will ever materialize after more than a decade of false starts. I have a few doubts or concerns about Edwards’ ability to execute, though I do see some risk of the TAVR funnel thinning out. What’s more, even if Edwards can continue growing at a mid-teens rate for a decade or more, that’s still arguably not enough to support the premium already priced into the shares.
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