EW Value Scorecard - Edwards Lifesciences

Value Scorecard · run 2026-10-18

13 value checks: 12 scored 1 to 5, plus moat evidence

36/60

moderate value score

Earnings & returns

EPS Trend

2/5

Diluted EPS: $2.44 (2022), $2.30 (2023), $6.97 (2024), $1.83 (2025). It ended at or below 2022; the framework scores that as 2.

ROE Trend

5/5

ROE (net income / common equity): 26.2% (2022), 21.1% (2023), 41.8% (2024), 10.4% (2025). Median 23.6%, lowest 10.4%; the framework scores a median above 20% as 5.

ROIC

3/5

ROIC of 10.6%: operating income of $1.26B divided by $11.88B of capital (total assets $13.70B minus current liabilities $1.81B), fiscal year to Dec 31, 2025, as filed in the 10-K (SEC EDGAR). The framework scores 10-15% as 3.

Profit Margins

4/5

Net margin of 15.4%; the framework scores 10-20% as 4; gross margin 77.8%, operating margin 29.8%.

Balance sheet & cash

Debt-to-Equity

5/5

Net cash: total debt $704.40M, total cash $4.25B. The framework scores a net cash position as 5.

Free Cash Flow

3/5

Free cash flow (operating cash flow minus capital expenditure): $953.40M (2022), $629.50M (2023), $259.90M (2024), $1.33B (2025). It ended above 2022 but did not rise in 2 of 3 years; the framework scores that as 3.

Retained Earnings

5/5

Retained earnings, as filed in the 10-Ks (SEC EDGAR): $7.59B (2022), $8.99B (2023), $13.17B (2024), $14.24B (2025). It rose every year; the framework scores that as 5.

Valuation models

Graham IV

1/5

IV = EPS x (8.5 + 2g) x (4.4 / Y) = $1.68 x (8.5 + 2 x 0.0) x (4.4 / 4.5) = $13.96 (EPS CAGR -10.8% floored at 0%; the formula returns a negative value below -4.25% growth). Current price $86.60; price is 520.2% above the model value.

DCF Value

1/5

FCF/share = $2.140, stage 1 growth = 10.0% for 5 years, terminal growth = 3%, discount rate = 10%. Stage 1 PV = $10.70, PV of terminal value = $31.49, DCF value = $42.20. Current price $86.60; price is 105.2% above the model value.

Margin of Safety

1/5

Graham value $13.96 (price is 520.2% above the model value); DCF value $42.20 (price is 105.2% above the model value).

Price-to-Book

2/5

P/B of 4.70; the framework scores 3.0-5.0 as 2.

Business quality

Moat Evidence

Not scored

A moat (a brand, a network, switching costs, patents, scale, a licence) is not a number in the filings, so Valerius doesn’t score it. Below are the figures and the words moat analysis starts from, from the company’s own 10-K filings. The conclusion is yours.

Return on capital, each year

Above 15% in 7 of 10 years (2016-2025); lowest 10.6%, highest 25.7%.

Gross margin, each year

Between 73.1% and 83.8% over 10 years (a range of 10.7 points).

Competition, in the company’s own words · 10-K filed Feb 25, 2026

The medical technology industry is highly competitive. We compete with divisions of larger companies as well as smaller companies that offer competitive product lines in certain geographies in which we operate. We also compete with both established and newer technologies that address the patients served by our products. New product development and technological change characterize the areas in which we compete. Our

The opening of the company’s “Competition” section in its 10-K, quoted word for word, not summarized or edited. It is the company’s own description, not Valerius’s view, and may include the company’s expectations. Open the filing.

Return on capital = operating income / (total assets − current liabilities), the ROIC row’s definition; 15% is the framework’s return threshold. Gross margin = gross profit / revenue. Both from each year’s 10-K via SEC EDGAR. Moat analysis commonly looks at whether returns and margins held up over many years. These figures don’t say whether the company has an advantage, what it is, or whether it will last.

Capital Allocation

4/5

Capital allocation, 2022-2025: dividends or buybacks paid in every year (pass); $4.66B paid out against $3.18B of free cash flow (fail: paid out more than free cash flow); total debt $691.30M to $705.40M, up 2.0%, 0.5x EBITDA (pass: not up more than 10%); shares outstanding 0.61B to 0.58B, down 4.5% (pass). 3 of 4 tests passed; the framework scores that as 4.

Filings

Company notices to the SEC

Not scored

Three kinds of event the company reported to the SEC in the last 5 years, from its filings on SEC EDGAR.

These are events the company reported to the SEC. An auditor change or a late filing can have many causes; each date links to the filing, where the company explains it. Valerius does not score these.

How the Graham and DCF values were calculated

  Graham Formula:
    IV = EPS x (8.5 + 2g) x (4.4 / Y)
    EPS = $1.68, g = 0.0%, Y = 4.5
    g floored at 0.0% (3-year EPS CAGR was -10.8%; below -4.25% the formula returns a negative value)
    IV = $13.96
    Current price $86.60 vs Graham value $13.96 — price is 520.2% above the model value.

  DCF:
    FCF/share = $2.140
    Stage 1 growth = 10.0% for 5 years | terminal growth = 3.0% | discount rate = 10.0%
      Y1: $2.354 → PV $2.140
      Y2: $2.590 → PV $2.140
      Y3: $2.849 → PV $2.140
      Y4: $3.134 → PV $2.140
      Y5: $3.447 → PV $2.140
    Stage 1 PV sum = $10.70
    Terminal value at end of Y5 = $50.72
    PV of terminal value = $31.49
    DCF value = $42.20
    Current price $86.60 vs DCF value $42.20 — price is 105.2% above the model value.

Data from yfinance summary figures and financial statements, and from the company’s 10-K filings via SEC EDGAR; computed at a price of $86.60. Every score is calculated from the figures by the framework’s fixed rules, and the explanation beside it is generated from the same figures: Graham value, DCF value, margin of safety, ROIC, profit margins, debt-to-equity, price-to-book, EPS trend, ROE trend, free cash flow, retained earnings and capital allocation. No AI is involved in this scorecard. The moat is shown as evidence, without a score. Read each score with the figures beside it. Intrinsic value calculations are model outputs based on stated assumptions, not predictions.

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