Edwards Climbs 14% in 3 Months as Growth Strength Tests Valuation

Edwards Lifesciences Corporation EW shares have gained 14% in the past three months as growth across its structural-heart franchises has strengthened the operating case. Second-quarter results showed double-digit expansion in transcatheter aortic valve replacement and faster growth in transcatheter mitral and tricuspid therapies.

The rally leaves investors balancing broader growth and raised 2026 expectations against a valuation that already reflects meaningful execution.

EW’s 3-Month Gain Meets a Premium Valuation

EW trades at 28.8X forward 12-month EPS, above 27.3X for the Zacks sub-industry and 20.7X for the S&P 500. The stock has also outpaced the S&P 500’s 4.5% gain over the past three months, although it trails the sub-industry’s 18.9% advance.

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The current multiple is close to Edwards’ five-year median of 30.0X. That positioning suggests the market is already assigning substantial value to continued growth, leaving less room for execution setbacks after the recent share-price increase.

Edwards’ Growth Engines Remain Broad-Based

Second-quarter 2026 TAVR sales reached $1.26 billion, rising 10.5% at constant currency. TMTT sales increased 44.8% at constant currency to $195.9 million, while Surgical sales advanced 5% at constant currency to $284 million.

The mix matters because Edwards is not relying on a single franchise. TAVR remains the largest platform, Surgical continues to benefit from RESILIA-based technologies and TMTT is adding a faster-growth layer. Medtronic plc MDT remains a relevant structural-heart competitor, with its Evolut TAVR platform supported by ongoing clinical evidence.

EW’s TMTT Momentum Adds a Faster-Growth Layer

PASCAL, EVOQUE and SAPIEN M3 all contributed ahead of management’s expectations in the second quarter. PASCAL adoption increased, EVOQUE expanded through new and existing centers, and SAPIEN M3 broadened Edwards’ mitral replacement offering.

Management raised its 2026 TMTT sales outlook to $760-$780 million from $740-$780 million and continues to target $2 billion in TMTT revenues by 2030. That target highlights the franchise’s role in Edwards’ longer-term growth plan as access broadens and treatment centers gain experience.

Edwards Faces FX, Litigation and Coverage Risks

Foreign exchange reduced adjusted gross margin by about 70 basis points in the second quarter, even as it added roughly $15 million to reported sales. Management expects foreign exchange to reduce second-half sales by about $35 million if rates remain at current levels and sees 2026 gross margin near the lower end of its 78-79% range.

Per the Zacks Consensus Estimates, the company’s 2026 earnings and revenues are pegged at $3.00 and $6.76 billion, respectively. 

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Litigation also remains unresolved, while reimbursement and trade policy could affect demand, access and costs. Management expects a final U.S. TAVR coverage decision in September 2026. Boston Scientific Corporation BSX is also pursuing a potential entry into balloon-expandable TAVR through its 2026 investment in MiRus, underscoring the competitive intensity surrounding structural-heart therapies.

EW’s Mixed Signals Temper the Rally Case

Edwards’ growth profile remains favorable, but the recent advance and premium valuation make further gains more dependent on execution. Continued TAVR expansion, TMTT scaling and supportive coverage developments could help the operating case, while currency, legal and competitive risks may pressure returns.

EW currently carries a Zacks Rank #3 (Hold) and a VGM Score of C. Its Growth Score of A supports the company’s growth characteristics, while the Value Score of D and Momentum Score of F are less favorable. Together, those signals argue for selectivity after the three-month rally rather than an aggressive stance based on price performance alone.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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