Financial Analysis: Edwards Lifesciences (EW) versus Cynosure (CYNO)

Edwards Lifesciences (NYSE: EW) and Cynosure (NASDAQ:CYNO) are both medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, analyst recommendations and profitability.

Earnings and Valuation

This table compares Edwards Lifesciences and Cynosure’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Edwards Lifesciences $2.96 billion 9.15 $569.50 million $3.44 37.26
Cynosure N/A N/A N/A $0.60 110.00

Edwards Lifesciences has higher revenue and earnings than Cynosure. Edwards Lifesciences is trading at a lower price-to-earnings ratio than Cynosure, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations for Edwards Lifesciences and Cynosure, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Edwards Lifesciences 0 4 14 1 2.84
Cynosure 0 3 1 0 2.25

Edwards Lifesciences currently has a consensus price target of $129.87, indicating a potential upside of 1.33%. Cynosure has a consensus price target of $64.00, indicating a potential downside of 3.03%. Given Edwards Lifesciences’ stronger consensus rating and higher probable upside, analysts clearly believe Edwards Lifesciences is more favorable than Cynosure.

Profitability

This table compares Edwards Lifesciences and Cynosure’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Edwards Lifesciences 22.47% 27.22% 15.67%
Cynosure 0.70% 0.75% 0.59%

Insider & Institutional Ownership

81.5% of Edwards Lifesciences shares are held by institutional investors. 2.1% of Edwards Lifesciences shares are held by insiders. Comparatively, 2.9% of Cynosure shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Edwards Lifesciences beats Cynosure on 10 of the 12 factors compared between the two stocks.

About Edwards Lifesciences

Edwards Lifesciences Corporation is a manufacturer of heart valve systems and repair products used to replace or repair a patient’s diseased or defective heart valve. The Company is engaged in patient-focused innovations for structural heart disease and critical care monitoring. Its segments include United States, Europe, Japan and Rest of World. Its products are categorized into three areas: Transcatheter Heart Valve Therapy, Surgical Heart Valve Therapy and Critical Care. It also develops hemodynamic monitoring systems that are used to measure a patient’s cardiovascular function in the hospital setting. It is developing products, such as the Edwards SAPIEN 3 Ultra System and Edwards SAPIEN XT transcatheter heart valve, among others. Its Transcatheter Heart Valve Therapy and Surgical Heart Valve Therapy products are manufactured in the United States, Singapore and Switzerland. Critical Care products are manufactured in its facilities located in Puerto Rico and the Dominican Republic.

About Cynosure

Cynosure, Inc. develops, manufactures and markets aesthetic treatment systems that enable plastic surgeons, dermatologists and other medical practitioners to perform non-invasive and minimally invasive procedures to remove hair, treat vascular and benign pigmented lesions, remove multi-colored tattoos, revitalize the skin, reduce fat through laser lipolysis, reduce cellulite, clear nails infected by toe fungus, ablate sweat glands and improve women’s health. The Company also markets radiofrequency (RF), energy-sourced medical devices for surgical applications, such as facial plastic and general surgery, gynecology, ear, nose, and throat procedures, ophthalmology, oral and maxillofacial surgery, podiatry and proctology. The Company sells its products globally under the Cynosure, Palomar, ConBio and Ellman brand names. Its product portfolio includes single energy source systems, as well as workstations that incorporate two or more different types of lasers or light-based technologies.

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