Core Insights - Boston Scientific (BSX) reported an adjusted gross margin of 71% in Q3 2025, a 60-basis-point improvement year-over-year, primarily due to a favorable product mix and strong growth in electrophysiology (EP) and WATCHMAN units, although tariffs limited growth potential [1][4] - WATCHMAN's sales increased by 35% in Q3, with over 600,000 patients treated, driven by accelerated adoption in the U.S. and strong clinical evidence [2] - EP sales surged 63% year-over-year, supported by the growth of the Farapulse Pulsed Field Ablation (PFA) System, with expectations for global PFA penetration to reach about 50% by the end of 2025 [3] Financial Performance - The adjusted operating margin rose by 80 basis points to 28%, reflecting solid performance on the top line [1] - Full-year adjusted gross margin is expected to be slightly above 2024 levels, despite an estimated $100 million tariff headwind, with management projecting an operating margin expansion of approximately 100 basis points [4] Market Position and Valuation - Year-to-date, Boston Scientific shares have increased by 9.8%, outperforming the industry growth of 3.4% [7] - The company's shares trade at a forward 12-month Price-to-Sales (P/S) ratio of 6.59, which is lower than its median but above the industry average [9] Earnings Estimates - Earnings estimates for Boston Scientific are showing an upward trend, with current estimates for the current year at $3.04 and $3.45 for the next year [11]

Industry Overview - Cardiovascular disease is the largest contributor to healthcare spending globally, presenting significant growth opportunities in the cardiovascular devices market, which is projected to grow at a CAGR of nearly 5% from 2025 to 2030, driven by minimally invasive procedures, technological advancements, and AI integration [1] Company Analysis: Boston Scientific - Boston Scientific has a market capitalization of approximately $144 billion and specializes in a wide range of interventional medical devices [2] - The company is well-positioned in the $20 billion global MedSurg market, which is expected to grow at 7% through 2026-2028, with Boston Scientific aiming to exceed this growth [3] - Recent acquisitions, including Nalu Medical, Silk Road Medical, Intera Oncology, SoniVie, and Elutia, Inc., enhance its growth potential [3] - The Farapulse Pulsed Field Ablation System has gained FDA approval for expanded use in treating drug-refractory, symptomatic, persistent atrial fibrillation, contributing to its market share in electrophysiology [4] - The WATCHMAN business is rapidly growing, with favorable future prospects driven by new data and device launches [5] - Full-year net sales are expected to grow approximately 20% on a reported basis and 15.5% organically, with adjusted earnings anticipated between $3.02 and $3.04 per share, indicating a growth of 20% to 21% compared to 2024 [6] Company Analysis: Edwards Lifesciences - Edwards Lifesciences, valued at around $49 billion, focuses on structural heart innovation and reported a 12.6% year-over-year growth in Q3 2025 [7] - The company benefits from its RESILIA portfolio, with strong contributions from therapies like INSPIRIS, KONECT, and MITRIS, and is expanding its global access [8] - The introduction of the SAPIEN M3 is expected to enhance physician awareness and referrals, contributing to the growth of Transcatheter Mitral and Tricuspid Therapies, projected to reach $2 billion by 2030 [10] - The TAVR segment is experiencing growth due to renewed focus on treating aortic stenosis, with FDA approval for the SAPIEN 3 platform for severe AS patients without symptoms [11] - Edwards' updated sales growth guidance is at the high end of 9-10%, with adjusted EPS guidance raised to $2.56 to $2.62 [12] Comparative Analysis - Boston Scientific is viewed as the more compelling investment option due to its broad electrophysiology portfolio, strength in the WATCHMAN business, and impactful acquisitions [9] - Both companies have outperformed the broader medical sector, but Edwards has shown more resilience [16] - Boston Scientific trades at a forward price-to-sales ratio of 6.51X, which is lower than its historical median and Edwards' price-to-earnings ratio of 7.53X [16] - Analysts remain bullish on both companies, but Boston Scientific's attractive valuation makes it a more appealing choice currently [18]