ABT vs. EW: Which Structural Heart Device Stock Is Worth Buying Now?

Abbott Laboratories (ABT) and Edwards Lifesciences (EW) are prominent players in the structural heart device market, which is projected to grow at a 13.5% CAGR through 2033. Abbott reported a 12% increase in Q2 structural heart sales, bolstered by new product approvals and a strong nutrition business, maintaining robust financial solvency and trading at a comparatively attractive 4.87x forward price-to-sales multiple. While Edwards achieved 7.7% growth in its surgical structural heart segment with new product rollouts, it faced Q2 margin contraction due to macroeconomic pressures. The analysis favors ABT, citing its superior year-to-date stock performance (+16.1% vs. EW's +9.8%) and higher estimated 2025 EPS growth (10.3% vs. 2.5%), alongside its valuation discount.

Analysis

Both Abbott Laboratories (ABT) and Edwards Lifesciences (EW) are positioned to benefit from the high-growth structural heart device market, which is projected to expand at a 13.5% CAGR. However, their recent performance and forward-looking metrics present a clear contrast. Abbott demonstrated superior execution in its second quarter, with its Structural Heart segment sales growing 12% year-over-year and its gross margin expanding by 79 basis points. This operational strength is further supported by a diversified revenue stream from its robust Nutrition business. In contrast, Edwards Lifesciences, while achieving 7.7% growth in its surgical structural heart segment and securing key FDA approvals, experienced both gross and operating margin contraction due to macroeconomic pressures. Financially, while both companies maintain healthy balance sheets, the valuation gap is significant: ABT trades at a forward price-to-sales multiple of 4.87x, below the sector average, while EW commands a premium at 7.53x. This valuation disparity is particularly noteworthy given that consensus estimates project 10.3% EPS growth for Abbott in 2025, versus just 2.5% for Edwards, suggesting Abbott offers a more attractive risk-reward profile based on current data.

Key Decisions for Investors

• Given its stronger Q2 growth, margin expansion, and a more favorable valuation at a 4.87x forward P/S ratio, Abbott Laboratories presents a more compelling investment case relative to Edwards Lifesciences.
• Investors in Edwards Lifesciences should closely monitor future earnings for a reversal of the margin contraction trend, as its premium 7.53x P/S valuation appears challenged by its modest 2.5% projected EPS growth.
• Consider Abbott's diversified business model, including its strong Nutrition segment, as a key defensive attribute that provides a buffer against segment-specific headwinds, a feature Edwards lacks.
• While both companies have strong product pipelines, the market appears to be rewarding Abbott's superior year-to-date performance (+16.1% vs. +9.8% for EW) and higher growth outlook, suggesting a preference for demonstrated execution over potential.