Boston Scientific stock (NYSE: BSX) has gained 3% in the five days since its Q4 earnings report last week. Although the company exceeded expectations with both its results and guidance, the modest stock increase may be due to the significant price appreciation ahead of the earnings announcement. So far, BSX stock has risen 19% year-to-date.
Looking at a longer period, BSX has been a strong performer, surging 129% since early January 2023—rising from $46 to approximately $106—compared to a 58% increase in the S&P 500 during the same time. This growth is primarily due to:
- A 56% expansion in the company’s trailing P/E ratio, which now stands at 42x compared to 27x in 2022.
- A 47% increase in earnings per share, growing from $1.71 to $2.51.
We explore these factors in more detail below. However, if you’re looking for investment options with lower volatility than individual stocks, consider the High-Quality portfolio, which has outperformed the S&P 500, delivering over 91% returns since its inception.
Boston Scientific’s revenue climbed 32%, rising from $12.7 billion in 2022 to $16.7 billion in 2024, driven by an increase in total procedures and the introduction of new products such as POLARx and Vercise. The Watchman FLX, a key product within the cardiovascular segment, has been a significant driver of sales growth. Additionally, the company’s adjusted operating margin expanded from 25.6% in 2022 to 27.0% in 2024. The combination of higher revenue and improved margins led to a 47% rise in net earnings, from $1.71 to $2.51 per share.
In its most recent results, Boston Scientific posted an 18% year-over-year revenue increase in 2024, with its cardiovascular segment rising 22% and its MedSurg segment—which includes endoscopy, urology, and neuromodulation—growing 10.5%. The company’s operating margin expanded by 75 basis points to 27% for the full year, helping push earnings per share to $2.51, an increase of 22%. Looking ahead, Boston Scientific expects 13.5% revenue growth and projects adjusted earnings to reach approximately $2.84 at the mid-point of its guidance range. Both metrics slightly exceeded analyst expectations.
With strong sales growth and expanding margins, BSX stock has been rewarded by investors, reflected in its valuation multiple, which has surged 56% since early 2023. The stock has increased in value each of the past four years, but that hasn’t always translated into consistent outperformance against the market. BSX returned 18% in 2021, 9% in 2022, 25% in 2023, and 55% in 2024.
Similarly, the Trefis High-Quality Portfolio, a collection of 30 stocks, has demonstrated lower volatility while consistently outperforming the S&P 500 over the past four years. Why? These stocks have delivered better risk-adjusted returns compared to the broader market, offering a smoother investment ride, as shown in HQ Portfolio performance metrics.
Given the current economic uncertainty, including rate cut expectations and ongoing trade tensions, can BSX continue its strong performance? We believe the stock now has limited upside. At its current price of $106, BSX trades at 42x trailing earnings of $2.51 per share—well above its five-year average P/E ratio of 31x. While Boston Scientific’s solid revenue and earnings growth may justify a higher valuation, its current price seems to have already factored in these positives. Investors might find better opportunities by waiting for a pullback.
Although BSX stock appears fully valued, it’s useful to compare Boston Scientific’s competitors on key financial metrics. You can also find insightful company comparisons across different industries at Peer Comparisons.
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