Is EW Stock Worth Buying as Growth Clashes With a Premium Valuation?

EW’s Growth Profile Is Getting Stronger

Second-quarter adjusted operating income rose 20.8% to $522.7 million, and adjusted operating margin expanded 180 basis points to 30%. Revenue growth outpaced operating-expense growth enough to produce meaningful earnings leverage.

TAVR sales totaled $1.26 billion, up 10.5% at constant currency. Management raised 2026 TAVR constant-currency growth guidance to 8-9% from 7-9% and lifted companywide constant-currency sales growth guidance to 10-11% from 9-11%. The Zacks Consensus Estimate projects 2026 company revenue growth of 11.1%.

Edwards’ TMTT Portfolio Expands the Opportunity

Transcatheter Mitral and Tricuspid Therapies sales reached $195.9 million in the second quarter, up 44.8% at constant currency. PASCAL, EVOQUE and SAPIEN M3 all contributed ahead of management’s expectations as adoption broadened across mitral and tricuspid procedures.

Management raised 2026 TMTT sales guidance to $760-$780 million from $740-$780 million and continues to target $2 billion in TMTT revenues by 2030. That faster-growing platform gives Edwards a second major avenue alongside its much larger TAVR franchise.

Based on short-term price targets offered by 27 analysts, the average price target for Edwards Lifesciences comes to $101.78. The average price target represents an increase of 9.38% from the last closing price. 

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EW’s Premium Valuation Raises the Bar

EW trades at a forward 12-month price-to-earnings ratio of 28.78, compared with 27.25 for the Zacks sub-industry, 21.15 for the Zacks sector and 20.66 for the S&P 500. Its five-year median is 30, so the stock is not far from its own longer-term norm despite trading above broader benchmarks.

The premium matters because large medical-device peers are still investing aggressively. Abbott Laboratories ABT reported 9% second-quarter 2026 Medical Devices sales growth, while Boston Scientific Corporation BSX posted 8.3% growth in cardiovascular sales. Those results reinforce the competitive intensity surrounding high-growth cardiovascular markets.

Edwards Faces Margin and Execution Risks

Adjusted gross margin was 77.6% in the second quarter, unchanged year over year, as lower manufacturing expenses offset a roughly 70-basis-point foreign-exchange headwind. Management expects 2026 gross margin near the lower end of its 78%-79% range.

Litigation, tariffs and reimbursement add execution uncertainty. Edwards also expects its 2026 tax rate at the high end of the prior 16-19% range and faces intense competition as a prior competitor-exit benefit rolls off in Europe. Sustaining differentiation in SAPIEN and newer structural heart platforms remains important.

In the past year, EW shares rose 18.4% outperforming the industry’s 3.2% decline. 

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EW’s Growth Score Supports a Patient Approach

The investment case remains balanced. Edwards has expanding structural heart opportunities, improving operating leverage and ample liquidity, but its valuation already reflects a meaningful growth premium and leaves less room for execution setbacks for investors considering new positions.

EW currently carries a Zacks Rank #3 (Hold). Its Growth Score of A supports the strength of its growth characteristics, but a Value Score of D and Momentum Score of F temper the setup. The VGM Score of C points to a mixed profile across value, growth and momentum. Because Zacks Style Scores are designed to complement the Zacks Rank, this combination favors patience rather than treating growth alone as a sufficient buy signal.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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