Boston Scientific's Undervalued Innovation: Why Now is the Time to Buy

Boston Scientific (NYSE: BSX) is sitting on a trove of underappreciated growth catalysts that could propel its stock higher in 2025—and investors are missing it. Despite near-term margin concerns highlighted at the Bank of America Healthcare Conference, the company’s strategic execution in cardiac ablation, oncology, and neuromodulation, coupled with disciplined cost management, positions it for a valuation re-rating. Here’s why you should act now.

Pipeline Momentum: NextGen Cardiac Ablation Dominates

The company’s FARAPULSE™ PFA System is the star of its pipeline, with recent data from the ADVANTAGE AF Phase 2 trial proving its transformative potential. At 12 months, 73.4% of patients with persistent atrial fibrillation (AF) were free of arrhythmias, far exceeding the trial’s 40% efficacy target. Critically, the system’s safety profile—just 2.4% adverse events—eliminates risks like pulmonary vein stenosis or phrenic nerve damage that plague older technologies.

This data isn’t just academic: FDA approval for persistent AF is expected by year-end, expanding the system’s addressable market. Meanwhile, the FARAPOINT™ PFA Catheter (approved in the U.S. and Europe by Q4 2025) and the FARAFLEX™ Mapping Catheter (under trial) are solidifying Boston Scientific’s lead in the $3.5 billion AF ablation market.

Strategic Execution: Margin Resilience and Smart Acquisitions

Market skeptics have fixated on near-term margin pressures, but Boston Scientific is proving them wrong. Q1 2025 saw adjusted operating margins hit 28.9%, up from 27% in 2024, while guidance for 2025 now targets 27.5-27.75%. The company absorbed $200 million in China tariffs—a headwind—yet still boosted gross margins to 71.5%, guided toward a pre-2019 target of 72.4%.

CFO Dan Brennan’s mantra—“The margin expansion journey is alive and well”—is no empty boast. Cost discipline (e.g., $100M in discretionary cuts) and operational excellence (e.g., WAMGR optimization) are fueling resilience. Even better, strategic tuck-in acquisitions like Bolt Medical (intravascular lithotripsy) and SoniVie (renal denervation) are unlocking high-margin adjacencies without diluting margins.

Undervalued Growth Areas: Oncology & Neuromodulation

The market overlooks Boston Scientific’s oncology and neuromodulation segments, which are ripe for upside. In oncology, the Ferrapulse PFA System’s first-year $1B sales set a gold standard for minimally invasive therapies. Meanwhile, neuromodulation—driven by spinal cord stimulation and sacral nerve modulation—is a $4B market where Boston Scientific’s LUMINITY™ System is gaining traction.

These segments aren’t just “nice to haves.” They’re adjacent to its core cardiac business, leveraging the same salesforce and procedural workflows. With 12-14% organic revenue growth already in 2025 guidance, these areas are the unsung heroes of the stock’s potential.

Near-Term Catalysts to Watch

• Q2 2025 Earnings (July 2025): Guidance calls for 17.5-19.5% reported sales growth, with PFA and Watchman sales likely to outperform.
• FDA Approvals: FARAPULSE’s persistent AF label (Q4 2025) and FARAPOINT’s global approvals will solidify its leadership.
• Bernstein Conference Follow-Through: Analysts will scrutinize margin expansion and pipeline execution—BSX is poised to exceed expectations.
• September 2025 Investor Day: Long-term targets (e.g., exceeding 30% margins) will reframe the stock’s multiple.

Why Buy Now?

The market is pricing in margin headwinds and overlooking the $300M+ annualized revenue potential from PFA’s addressable AF market. At a forward P/E of 15.6x, BSX is undervalued relative to peers like Medtronic (19.2x) and Abbott (18.7x).

With $2.94 EPS by 2025 and a 15-17% revenue growth runway, the stock is primed for a re-rating. The $55-60 price target (from $50 today) is achievable by year-end—if not sooner.

Conclusion: Buy BSX Before the Catalysts Hit

Boston Scientific’s innovation-driven growth, margin resilience, and underappreciated segments make it a standout buy in a cautious healthcare market. The next 12 months will see FDA wins, earnings beats, and strategic clarity—events that could finally close the valuation gap. Don’t wait: act before the crowd catches on.

Action: Buy Boston Scientific (BSX) ahead of Q2 earnings and the Bernstein conference.