Edwards' Structural Heart Engine Accelerates, But the Market's Valuation Still Asks for More

The quarter that rewrote expectations

Edwards Lifesciences delivered a second quarter that beat expectations almost everywhere. “We delivered stronger-than-expected second quarter sales growth of 12.5%.” — Bernard Zovighian, Chief Executive Officer · 2026-07-23 The beat was broad-based—TAVR grew 10.5% globally, surgical added 5%, and the New York Valves conference showcased fresh data that reinforced the company's durable growth thesis. Management raised full-year guidance to 10–11% for total company, 8–9% for TAVR, and narrowed TMTT to $760–$780 million. But the market has been less enthusiastic: the stock has risen only ~15% over the past 90 days, and at ~34x trailing operating income, investors are still wrestling with how much of this growth is already priced in.

TAVR: durability meets a new demand curve

The “It's the first randomized trial looking at the treatment of moderate AS patients. And the heterogeneous nature of this population is not well understood.” — Daniel Lippis, Global Leader of TAVR · 2026-07-23 The PROGRESS trial results, expected at TCT this fall, could open a patient population at least as large as symptomatic severe AS. The NCD update, which the company is encouraged about, could also streamline access and drive volume growth into 2027 and beyond. As Bernard said on the prior quarter's call, “the quarter really came better than expected for TAVR.” — Bernard Zovighian, Chief Executive Officer · 2025-07-24 And reflecting on the momentum, he reiterated, “we are very pleased about the quarter overall in the year for Edwards Lifesciences Corporation. With regards to TAVR, very pleased about the quarter.” — Bernard Zovighian, Chief Executive Officer (CEO) · 2026-02-10 The durability of the SAPIEN platform, now reinforced by 7-year PARTNER 3 and 10-year COMMENCE data, is helping Edwards take share even as a competitor exited Europe in 2025.

TMTT: the portfolio becomes the growth story

“Our differentiated TMTT repair and replacement therapies drove second quarter sales of $195.9 million, an increase of 44.8% year-over-year.” — Theodora Mistras, Chief Financial Officer · 2026-07-23 The acceleration was led by Tricuspid patients gaining access to PASCAL's tricuspid indication, EVOQUE scaling across new centers, and early success for SAPIEN M3. As Daveen Chopra described, “we see a lot of excitement for the technology. We see the continued new data coming out, people adding to the overall clinics portfolio that makes people want to use EVOQUE.” — Daveen Chopra, Global Responsibility for TMTT, Surgical and IH · 2026-07-23 The new center adoption curve is still early, and the path to $2 billion in TMTT revenue by 2030 looks more credible.

Valuation and the tape: the future is already priced?

The fundamental story is improving. Total Revenue grew 12.5% YoY in Q2, and the full-year guide was raised. Operating margins are expanding 150bps on a constant-currency basis, and the company continues to generate solid free cash flow. But at ~34x trailing operating income and ~7.3x sales, the valuation leaves little room for error. The lifetime management angle is a reminder of the long-term durability story, but also of the complexity of predicting valve-on-valve procedures. The tape—up 15% in 90 days but still 5.7% below its July peak—suggests the market is waiting for the PROGRESS results and the NCD policy before adding to positions.

If you put all of this in perspective, we are, in my mind, sitting in front of an amazing opportunity.