Boston Scientific Corp (BSX)

Conclusion

Boston Scientific develops, manufactures and sells medical devices across its MedSurg and Cardiovascular segments, including stents, left atrial appendage closure devices and implantable cardiac devices. The shares closed at 45.82 USD on 4 November 2026, giving a market capitalisation of 66.40 billion USD.

The verdict is undervalued. The P/E of 19.03 is at a premium of -68.5% to its ten-year median of 60.41, and the P/FCF of 18.32 is at a premium of -62.2% to its median of 48.50. The discounted cash flow gives 56.60 USD per share, and the fair value from historical multiples is 121.30 USD. The fair value band runs from 71.16 to 106.74 USD with a midpoint of 88.95 USD, a margin of safety of 94.1% at the current price. The reverse DCF implies growth of 5.57% a year, against revenue growth of 15.16% a year over five years and free cash flow per share growth of 25.09% a year.

What holds the case up is free cash flow conversion of 126.8% over five years, a Piotroski score of 7 out of 9, and interest coverage of 11.1x. What could break it is the next-year EPS estimate, cut by 8.0% over 90 days with 11 downward revisions and no upward ones in the last 30 days, the next-year EPS growth of -0.44%, and a five-year median ROIC of 6.91% sitting below a WACC of 8.93%.

Financial health

Financial strength is grey, because there is not enough data for a full assessment. Interest coverage of 11.1x is good on a trailing basis. The current ratio, quick ratio, net debt to EBITDA and debt to equity are not available, because the company's debt and cash figures are missing from the data. The Altman Z-score is also not available, since its inputs are missing; the Altman model was designed for manufacturers, so it would be a rough guide for a medical device maker in any case. Insolvency risk: low, about 0.13% by the estimate of the Ohlson model over one to two years.

Earnings quality

Earnings quality is green, held up by a Piotroski score of 7 out of 9, free cash flow conversion above 100%, and seven earnings beats in the last eight quarters. Trailing free cash flow conversion is 103.9%, and the five-year figure is 126.8%. The accrual ratio is -3.97%. Stock-based compensation is 1.52% of revenue, and free cash flow after it is 3.31 billion USD on a trailing basis. The share count has risen at a compound 1.07% a year over five years, so buybacks have not reduced it. The Beneish M-score is not available. Average earnings surprise over the eight quarters is 4.2%, but estimates are falling: the current-year estimate is down 3.7% over 90 days and the next-year estimate is down 8.0%.

Profitability

Profitability is green, held up by operating and net margins that sit well above their ten-year medians. The gross margin is 70.4% against a median of 63.2%, the operating margin is 21.1% against 15.8%, and the net margin is 16.6% against 9.9%. The trailing ROIC is not available, so the ROIC minus WACC value cannot be quoted. The five-year median ROIC is 6.91%, below the WACC of 8.93%, which is the main weakness in this area. ROE is not available. The DuPont split for 2025 shows a net margin of 14.4%, an asset turnover of 0.46 and an equity multiplier of 1.80, so leverage adds only modestly to the return on equity.

Growth

Growth is yellow, held up by strong revenue and EPS growth but pulled down by a falling next-year estimate. Revenue has compounded at 16.5% over three years, 15.2% over five years and 10.4% over ten years. EPS has compounded at 58.5% over three years. Free cash flow per share has compounded at 56.8% over three years, 25.1% over five years and 25.0% over ten years. Revenue grew in nine of the ten comparable years. The next-year EPS growth estimate is -0.44%, which is the weak point in this section.

Valuation

Valuation is green. Against their ten-year medians, the P/E of 19.03 is at a premium of -68.5% to 60.41, the P/FCF of 18.32 at -62.2% to 48.50, and the P/S of 3.15 at -42.1% to 5.45. The current EV/EBITDA and P/B are not available, though their medians are 28.95 and 4.85. The DCF gives 56.60 USD per share, using a discount rate of 8.93%, first-decade growth of 10.38%, and terminal growth of 2.5%. The terminal value makes up 58.8% of that figure. The cost of debt is assumed at 6.93%, not reported. The fair value from historical multiples is 121.30 USD. The fair value band is an order of magnitude built on fixed assumptions, including a 5% equity risk premium and capped growth, and is not a price target. The reverse DCF implies 5.57% growth, against a five-year revenue CAGR of 15.16%, a gap given as -9.6%. The company pays no dividend, so the forward yield is 0%.

Risks

The main risk is that the earnings estimates keep falling. A next-year EPS growth of -0.44% and an 8.0% cut in 90 days would weaken the growth case, and the verdict rests on the market paying for the earnings already delivered. Returns on capital are also a concern: a five-year median ROIC of 6.91% below a WACC of 8.93% suggests the return on new investment may not exceed its cost. The DCF is sensitive to assumptions, since the terminal value is 58.8% of its value and the cost of debt is assumed. Several figures are not available: the debt, cash, current and quick ratios, net debt to EBITDA, the Altman Z-score, the Beneish M-score, the trailing ROIC and ROE, and the current EV/EBITDA and P/B. This analysis also has no debt maturity schedule and no revenue split by segment, so it cannot judge refinancing needs or which business lines drive growth.