Is Edwards Lifesciences Corp (EW) overvalued?
On Equity Rank's model estimate, EW trades 49% above its fair value. Edwards Lifesciences Corp (EW) last closed at $102.14; the multi-method model fair value is $68.75.
| Price | Model fair value | Price vs model |
|---|---|---|
| $102.14 | $68.75 | 49% above |
What the answer rests on
- 0 of 8 valuation methods put EW's value above its price and 8 put it below, so the methods mostly agree.
- To justify today's price, EW's free cash flow would need to grow about 14.7% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 11.9% a year.
- EW trades at 59.1 times its last year's earnings, against a median of 30.9 for 37 profitable Medical Devices companies.
- Over the past year the price sat below the model fair value on 0% of trading days. The gap ranged from 19% above to 79% above 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 EW's fair value · What prices assume · Other companies