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Let's talk about the popular Edwards Lifesciences Corporation (NYSE:EW). The company's shares saw significant share price movement during recent months on the NYSE, rising to highs of US$75.92 and falling to the lows of US$65.75. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Edwards Lifesciences' current trading price of US$69.04 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Edwards Lifesciences’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Edwards Lifesciences
Is Edwards Lifesciences Still Cheap?
The stock seems fairly valued at the moment according to our valuation model. It’s trading around 0.85% above our intrinsic value, which means if you buy Edwards Lifesciences today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $68.46, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that Edwards Lifesciences’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of Edwards Lifesciences look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a relatively muted profit growth of 5.2% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Edwards Lifesciences, at least in the short term.
What This Means For You
Are you a shareholder? It seems like the market has already priced in EW’s future outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?