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We came across a bullish thesis on Boston Scientific Corporation (BSX) on Substack by Magnus Ofstad. In this article, we will summarize the bulls’ thesis on BSX. Boston Scientific Corporation (BSX)'s share was trading at $94.27 as of April 14th. BSX’s trailing and forward P/E were 75.42 and 33.11 respectively according to Yahoo Finance.
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Boston Scientific (BSX), a leader in minimally invasive medical devices, operates across cardiology, electrophysiology, endoscopy, urology, neuromodulation, and oncology, delivering life-saving technologies such as pacemakers and defibrillators. The company’s unwavering focus on innovation has positioned it as a standout in the MedTech space. From early successes like steerable catheters to its transformative Taxus drug-eluting stent, BSX has consistently pushed the envelope in medical technology. Its recent advancements—the Watchman device for stroke prevention and the Farapulse Pulsed Field Ablation system for atrial fibrillation—underscore its commitment to addressing chronic diseases through cutting-edge solutions. Despite not offering a dividend, BSX commands a substantial market capitalization of $138.54B, reflecting investor confidence in its growth trajectory and technological edge.
A key pillar of BSX’s expansion strategy has been its disciplined approach to acquisitions, with over $17 billion spent in the last decade to enhance its product portfolio. This has gone hand-in-hand with a focus on operational efficiency, reflected in its robust 2024 gross profit margin of 68.4%. Such strong margins allow BSX to reinvest in R&D and fund its aggressive push into emerging markets such as China, Japan, and the broader EMEA region—diversifying revenues and strengthening its global footprint. Looking ahead, BSX projects revenue growth between 12.5% and 14.5% for fiscal 2025, with particularly strong demand expected for its Watchman and Farapulse systems. The company is targeting an EBIT margin in the high 20s, in line with top-tier MedTech peers like Coloplast (COLO) and Stryker (SYK), while aspiring to push past 30% in the long run.
Though medical device companies are often considered resilient during economic downturns, BSX's current valuation reflects a premium price. Its forward price-to-sales ratio of 7.2, combined with a projected revenue CAGR of 11.6%, implies a 17-year runway to fully grow into its multiple. While this suggests vulnerability in a recessionary environment, it also reflects confidence in BSX’s long-term innovation-driven growth story. In an industry where defensibility and differentiation are key, Boston Scientific emerges as the most compelling player in its peer group. Its robust pipeline, strategic vision, and consistent delivery of high-impact medical solutions make it a rare MedTech business with both durability and upside. Despite broader market risks, BSX offers investors a compelling blend of innovation, execution, and long-term potential.