Is Edwards Lifesciences Stock Really Expensive?
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Shares of Edwards Lifesciences (EW) trade at 56.9 times its earnings over the past twelve months, compared with 22.9 for the S&P 500. A multiple that high means buyers are paying today for profit the heart-valve maker has not yet earned. So how fast would Edwards have to grow just for today’s price to hold?
Slower Growth Would Do If Edwards’ Margin Recovers
Edwards looks expensive only in part. At the current price, the company would need to grow revenue about 6.8% a year for the next five years, while its sales rose 10.5% in the third quarter of 2026 from a year earlier. That 6.8% pace would only hold the share price where it is, and only if the profit margin at Edwards recovers as we assume.
Edwards had a market value of $58.1 billion at the November 5, 2026 close. At our P/E of 25.2 for a mature Edwards, that market value equals $2.31 billion of yearly profit. To earn that profit at a 24.8% net margin, Edwards would need $9.29 billion of revenue. We set that margin halfway between the company’s 21.4% average and its 28.2% high across the last twelve quarter ends, leaving out four unusually high readings. Edwards generated $6.67 billion of revenue over the past twelve months, and we allow five years for the company to reach the higher target because today’s P/E is 2.26 times the mature one. Our rule sets a five-year window when the current P/E is two to three times the mature one, unless sales growth is very fast or very slow.
All three figures are our assumptions, not forecasts from Edwards. We calculate the mature P/E by giving a 60% weight to a level of 22 times earnings for medical-device makers, and basing the rest on Edwards’ own average P/E. Edwards averaged a P/E of 31.2 across the last twelve quarter ends, but we cap this figure at 30, our upper limit.
Does Management Expect Edwards To Grow That Fast?
Yes, and faster. On November 4, management raised its sales growth forecast for 2026 to about 11.5%, up from 10.5% in July, and repeated a long-term target of about 10% average annual sales growth. Both figures are forecasts rather than results, and both exceed the growth Edwards would need at this price.
The largest segment is the Transcatheter Aortic Valve Replacement business, which generated $4.49 billion of the company’s $6.07 billion revenue in 2025. Management expects the unit to grow 9% to 9.5% in 2026. Over the long term, management anticipates mid- to high single-digit growth for the SAPIEN platform sold within that division, a range that includes the growth Edwards would need at this price.
The fastest-growing division, Transcatheter Mitral and Tricuspid Therapies, grew 56.4% in 2025. Management expects that business to reach $2 billion of revenue in 2030 with its PASCAL, EVOQUE and SAPIEN M3 products.
What If Edwards’ Profit Margin Stays This Thin?
In that scenario, Edwards would need to grow revenue 17.7% a year for five years just to sustain today’s price. The company posted a 15.3% net margin over the past twelve months, marking its lowest level since at least the end of 2016, and this margin case moves the required growth rate far more than the multiple or years cases we tested. That 17.7% hurdle sits well above the 13.4% revenue growth Edwards achieved over the latest twelve months.
The company recorded a 28.8% operating margin over the same twelve months, landing near its typical levels since 2016, so the thinner net margin came from items below operating profit. Even the third quarter’s own 17.9% net margin fell well below the margin we assume.
For today’s price to hold, Edwards must keep sales growing near its guided pace and lift its net margin back toward past levels. If the margin stays near today’s level, the company would require far faster growth than management has guided, and paying the current price becomes a riskier bet. Net margin is the measure to watch when Edwards reports fourth-quarter results, expected in February 2027.
Now You Know Edwards Lifesciences. Here Is A Better Way To Invest
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