Is Boston Scientific Corp (BSX) overvalued?
On Equity Rank's model estimate, BSX trades 32% below its fair value. Boston Scientific Corp (BSX) last closed at $42.75; the multi-method model fair value is $62.94.
| Price | Model fair value | Price vs model |
|---|---|---|
| $42.75 | $62.94 | 32% below |
What the answer rests on
- 6 of 10 valuation methods put BSX's value above its price and 4 put it below, so the methods disagree.
- To justify today's price, BSX's free cash flow would need to grow about 0.8% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 58.8% a year.
- BSX trades at 19.3 times its last year's earnings, against a median of 31.3 for 37 profitable Medical Devices companies.
- Over the past year the price sat below the model fair value on 100% of trading days. The gap ranged from 42% below to 8% below the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind BSX's fair value · What prices assume · Other companies