Edwards Lifesciences (EW) and Its Strengthening Relative Strength Rating: A Signal for Momentum Investors?

The recent upgrade of Edwards Lifesciences (EW) to a Relative Strength (RS) Rating of 75—up from 66 in early 2025—has sparked renewed interest among momentum investors. This proprietary metric, calculated by Investor's Business Daily (IBD), evaluates a stock's 52-week performance relative to its peers, with scores above 80 historically signaling market leadership. While EW has not yet breached this threshold, its trajectory reflects a compelling confluence of operational strength, competitive positioning, and long-term sector tailwinds. For investors seeking to capitalize on momentum in the medical devices sector, the question is whether this upgrade is a harbinger of sustained outperformance or a temporary spike.

A Surge in Performance: Earnings, Guidance, and Market Share

Edwards' Q2 2025 results provided the catalyst for its RS Rating upgrade. The company reported $1.53 billion in sales, surpassing the $1.49 billion consensus, and adjusted earnings of $0.67 per share, exceeding estimates by $0.05. These figures were driven by robust growth in its Transcatheter Aortic Valve Replacement (TAVR) segment, which saw 8.9% year-over-year sales growth to $1.1 billion, and the Transcatheter Mitral and Tricuspid Therapies (TMTT) segment, which surged 61.9% to $134.5 million.

The company's confidence in its trajectory was underscored by an upward revision of full-year 2025 guidance. Total sales are now projected to reach $5.9 billion–$6.1 billion (9%–10% growth), with TAVR sales expected to grow 6%–7%. Adjusted EPS guidance was raised to the high end of its original range ($2.40–$2.50). Analysts, including those at Mizuho and Truist Securities, have responded by raising price targets to $87 and $81, respectively, reflecting optimism about Edwards' ability to maintain its momentum.

Competitive Positioning: Gaining Ground in a Dynamic Sector

Edwards' strength is not merely financial but also strategic. The company has capitalized on shifting dynamics in the TAVR market, particularly Boston Scientific's recent exit from the European TAVR market. This rebalancing has created a vacuum that Edwards is filling, with its SAPIEN platform—the only TAVR approved for asymptomatic patients in both the U.S. and Europe—gaining traction. Additionally, regulatory and reimbursement trends are favorable: the Centers for Medicare & Medicaid Services (CMS) is expanding coverage for asymptomatic TAVR procedures, a move expected to boost procedure volumes and market share.

Product innovation further cements Edwards' leadership. The approval of the SAPIEN M3 mitral valve replacement system and the adoption of the EVOQUE and PASCAL technologies in the TMTT segment are expanding the company's footprint in structural heart therapies. These advancements position Edwards to benefit from the broader shift toward minimally invasive procedures, a trend that is accelerating as patient demand and clinical evidence grow.

Financial Resilience and Shareholder Value

Edwards' financial health is another pillar of its appeal. The company ended Q2 2025 with $3 billion in cash and cash equivalents, a low debt-to-equity ratio of 0.07, and a gross margin of 77.5%. On August 19, 2025, it announced a $500 million accelerated share repurchase (ASR), signaling confidence in its intrinsic value. This follows $800 million in repurchases earlier in the year, with $600 million remaining under its authorization. Such actions, combined with strong free cash flow generation ($224.4 million in Q2), demonstrate a disciplined approach to capital allocation.

Long-Term Leadership: Can the RS Rating Cross 80?

For momentum investors, the critical question is whether Edwards can sustain its trajectory to an RS Rating of 80 or higher. Historically, stocks that breach this threshold often experience significant price appreciation, as they are perceived as market leaders. Edwards' current trajectory—bolstered by strong earnings, product differentiation, and favorable sector dynamics—suggests it is on the cusp. However, challenges remain. The TAVR market is competitive, and while Boston Scientific's exit is a near-term tailwind, other players may innovate to regain ground. Additionally, regulatory risks, such as pricing pressures or reimbursement changes, could temper growth.

Investment Considerations

Edwards Lifesciences' recent performance and strategic positioning make it a compelling case study in momentum investing. Its RS Rating upgrade, coupled with upgraded guidance and analyst optimism, indicates a stock in transition from a solid performer to a potential leader. For investors, the key metrics to monitor are:
1. RS Rating Progression: Can EW sustain its 75 rating and push toward 80?
2. TMTT Growth: Will the TMTT segment maintain its 60%+ growth rate as adoption of new technologies accelerates?
3. Reimbursement Trends: How will CMS and other payers shape the TAVR landscape in 2026?

Conclusion

Edwards Lifesciences is demonstrating the hallmarks of a market leader: strong earnings, innovative product pipelines, and a strategic response to competitive and regulatory shifts. While its RS Rating of 75 is not yet in the “big winner” territory, the company's fundamentals and trajectory suggest it is well-positioned to cross that threshold. For momentum investors, the combination of near-term catalysts—such as the ASR, TMTT growth, and expanding TAVR adoption—makes EW a stock worth watching. However, prudence is advised: the medical devices sector is cyclical and subject to regulatory risks. Those who can balance optimism with caution may find Edwards Lifesciences a rewarding addition to a diversified portfolio.