BSX stock has seen strong gains of 140% from levels of $35 in early January 2021 to around $85 in late October 2024, vs. an increase of about 50% for the S&P 500 over this period.
BSX is one of a handful of stocks that have increased their value in each of the last three years, but that still wasn't enough for it to consistently beat the market. Returns for the stock were 18% in 2021, 9% in 2022, and 25% in 2023. In comparison, returns for the S&P 500 have been 27% in 2021, -19% in 2022, and 24% in 2023 — indicating that BSX underperformed the S&P in 2021.
Boston Scientific's revenues rose 19.4% (y-o-y) to $4.2 billion in Q3 2024, with revenue growth seen in both segments. While the Cardiovascular segment saw an 25% rise in sales, MedSurg sales were up 10%. The adjusted EPS came in at $0.63, 26% higher than the $0.50 figure reported in the prior-year quarter.
Boston Scientific announced 10 acquisitions over the recent years. The company has closed the acquisition of spine solutions maker Vertiflex for an upfront cash payment of $465 million, and also the BTG plc acquisition, which added $220 million to the company's top line in 2020. In June 2021, Boston Scientific acquired the remaining 73% stake in Farapulse Inc. for a $295 million upfront payment and possible $92 million in milestone payments.
The company also holds a majority stake in Acotec, which is aiding its sales growth in China. Boston Scientific is currently in the process of acquiring Axonics and Silk Road Medical. The company expects these acquisitions to aid its long-term growth.
Below are key drivers of Boston Scientific's value that present opportunities for upside or downside to the current Trefis price estimate for the company's stock:
Founded in 1979, The Boston Scientific Corporation develops, manufactures, and supplies medical devices across the world. These devices are primarily sold in the following areas of medicine - Interventional Cardiology, Cardiac Rhythm Management, Endoscopy, Peripheral Interventions, Urology/Women's Health, Neuromodulation, and Electrophysiology. The company's largest sources of revenue are sales of Interventional Cardiology and Cardiac Rhythm Management devices.
Boston Scientific supplies its devices in around 125 countries around the world, mainly the U.S., Europe, the Middle East, Japan, Canada, China, India, and Brazil. The company historically has been very acquisitive in order to strategically expand its operations and sales.
Its main competitors are Johnson & Johnson, Medtronic, and Abbott.
Interventional Cardiology, Endoscopy, and Cardiac Rhythm Management are the major sources of revenue for the company. Here's why:
Coronary stents are implantable tubes that help in opening blocked arteries and ensuring smooth blood flow. These are the largest revenue driver for Boston Scientific, as it is the only company in the world to provide a two-drug platform. The company keeps launching improved versions of these stents to maintain its market leadership position. Continuous innovation and product improvement should allow Boston Scientific to maintain a healthy market share and increase its revenue base from the division, in our view.
Boston Scientific spends a significant portion of its revenues on research and development. As a result, it has been able to launch many self-manufactured products in the market. In the last few years, the company has launched a few new devices in its major segments. This has been fueling the top-line growth.
Stringent healthcare regulations have implemented checks on the pricing structure of medical device companies, which could have a negative impact on global revenue growth.
