EW Intrinsic Value

EW

Edwards Lifesciences Corp – Surgical Appliance and Supplies Manufacturing

edwards lifesciences (nyse: ew) is the global leader in the science of heart valves and hemodynamic monitoring. driven by a passion to help patients, the company partners with clinicians to develop innovative technologies in the areas of structural heart disease and critical care monitoring that save and enhance lives. headquartered in irvine, california, edwards lifesciences has extensive operations in north america, europe, japan, latin america and asia and currently employs about 6,400 individuals worldwide. for us, helping patients is not a slogan – it's our life’s work. from developing devices that replace or repair a diseased heart valve to creating new technologies that monitor vital signs in the critical care setting, we help ensure that patients regain and even improve their quality of life.

Analysis Results

Intrinsic Value	$80.67
Latest Price	$69.46
Relative Value	14% undervalued

Share results:

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Cash Flow (Billions)

Analysis Parameters

New Ticker

Analysis Details

Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 18.8%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 7.9%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 18.8%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year	Future flow (billion)	Present value (billion)
2023	1.8	1.67
2024	2.14	1.84
2025	2.54	2.02
2026	3.02	2.22
2027	3.59	2.45

Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 61.5 billion. This corresponds to a present value of 38.9 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 10.2 billion. Adding in the terminal value gives a total present value of 49.0 billion.

There are presently 608.0 million outstanding shares, so the intrinsic value per share is 80.67.

Financial Statements

The following data was to determine the past cash flows.

Current Assets	3,095,800,000
Current Cash	1,215,300,000
Current Liabilities	1,022,400,000
Current Debt	0
Non-Cash Working Capital (NCWC)	858,100,000
Change in NCWC	176,500,000
EBIT	1,788,100,000
Tax Provision	245,500,000
Depreciation and Amortization	139,600,000
Capital Expenditure	-264,800,000
Unlevered Free Cash Flow	1,591,024,674

Current Assets	3,180,700,000
Current Cash	1,466,800,000
Current Liabilities	1,032,300,000
Current Debt	0
Non-Cash Working Capital (NCWC)	681,600,000
Change in NCWC	-112,900,000
EBIT	1,592,600,000
Tax Provision	198,900,000
Depreciation and Amortization	134,800,000
Capital Expenditure	-329,800,000
Unlevered Free Cash Flow	1,098,584,759

Current Assets	3,091,000,000
Current Cash	1,402,600,000
Current Liabilities	893,900,000
Current Debt	0
Non-Cash Working Capital (NCWC)	794,500,000
Change in NCWC	229,800,000
EBIT	1,317,200,000
Tax Provision	93,300,000
Depreciation and Amortization	107,200,000
Capital Expenditure	-407,000,000
Unlevered Free Cash Flow	1,113,137,864

Current Assets	2,984,000,000
Current Cash	1,516,900,000
Current Liabilities	902,400,000
Current Debt	0
Non-Cash Working Capital (NCWC)	564,700,000
Change in NCWC	110,900,000
EBIT	1,205,800,000
Tax Provision	119,600,000
Depreciation and Amortization	89,300,000
Capital Expenditure	-278,400,000
Unlevered Free Cash Flow	1,003,970,612

Current Assets	2,286,900,000
Current Cash	956,500,000
Current Liabilities	876,600,000
Current Debt	0
Non-Cash Working Capital (NCWC)	453,800,000
Change in NCWC	64,100,000
EBIT	857,000,000
Tax Provision	39,200,000
Depreciation and Amortization	77,400,000
Capital Expenditure	-241,700,000
Unlevered Free Cash Flow	712,678,119

Current Assets	2,532,100,000
Current Cash	1,337,500,000
Current Liabilities	1,402,900,000
Current Debt	598,000,000
Non-Cash Working Capital (NCWC)	389,700,000
Change in NCWC	-46,700,000
EBIT	1,093,300,000
Tax Provision	451,300,000
Depreciation and Amortization	81,900,000
Capital Expenditure	-175,500,000
Unlevered Free Cash Flow	476,232,882

Current Assets	2,240,000,000
Current Cash	1,271,100,000
Current Liabilities	532,500,000
Current Debt	0
Non-Cash Working Capital (NCWC)	436,400,000
Change in NCWC	89,400,000
EBIT	785,900,000
Tax Provision	168,400,000
Depreciation and Amortization	71,200,000
Capital Expenditure	-217,400,000
Unlevered Free Cash Flow	549,745,670

Current Assets	2,047,900,000
Current Cash	1,224,700,000
Current Liabilities	476,200,000
Current Debt	0
Non-Cash Working Capital (NCWC)	347,000,000
Change in NCWC	-74,400,000
EBIT	635,800,000
Tax Provision	127,500,000
Depreciation and Amortization	65,800,000
Capital Expenditure	-102,700,000
Unlevered Free Cash Flow	394,254,980

Current Assets	2,294,600,000
Current Cash	1,438,800,000
Current Liabilities	434,400,000
Current Debt	0
Non-Cash Working Capital (NCWC)	421,400,000
Change in NCWC	-21,900,000
EBIT	1,232,200,000
Tax Provision	332,900,000
Depreciation and Amortization	68,600,000
Capital Expenditure	-82,900,000
Unlevered Free Cash Flow	837,434,108

Current Assets	1,725,800,000
Current Cash	936,900,000
Current Liabilities	345,600,000
Current Debt	0
Non-Cash Working Capital (NCWC)	443,300,000
Change in NCWC	20,200,000
EBIT	454,100,000
Tax Provision	123,600,000
Depreciation and Amortization	68,700,000
Capital Expenditure	-110,100,000
Unlevered Free Cash Flow	323,979,448

Current Assets	1,291,900,000
Current Cash	521,400,000
Current Liabilities	347,400,000
Current Debt	0
Non-Cash Working Capital (NCWC)	423,100,000
Change in NCWC	40,300,000
EBIT	407,300,000
Tax Provision	97,900,000
Depreciation and Amortization	57,300,000
Capital Expenditure	-120,700,000
Unlevered Free Cash Flow	282,244,822

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