Does Boston Scientific’s Rapid Rise Signal Further Growth in 2025?

If you are watching Boston Scientific and wondering whether it is time to make a move, you are not alone. This stock has been quietly climbing, shrugging off market noise and delivering solid returns for those patient enough to hold on. Take a look at its numbers: Boston Scientific’s share price has surged over 167.0% in the last five years, with a remarkable 144.6% gain over the past three. Even with the ups and downs in the broader medical device sector, it’s up 11.0% year-to-date and 4.0% just in the last week. Clearly, something is working in its favor.

While some investors are eyeing recent product innovations or shifts in healthcare policy as possible growth drivers, the real question many are asking is whether the current price accurately reflects Boston Scientific’s potential. Using six common valuation checks, the company scores only a 1 out of 6 for being undervalued, which suggests caution. But does that number tell the whole story?

Before making any decisions, it’s worth looking closer at those valuation methods. Each has its pitfalls, and there might be a better way to really gauge what Boston Scientific is worth. Let’s break down how analysts arrive at these valuation scores, and later on, we will explore an approach that goes beyond the traditional models.

Boston Scientific scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Boston Scientific Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model projects Boston Scientific’s future cash flows and discounts them back to their present value. This provides an estimate of what the business might be worth today based on its ability to generate cash over time.

For Boston Scientific, the most recent twelve months produced Free Cash Flow (FCF) of approximately $3.45 Billion. Analysts forecast that FCF will grow steadily, with projections rising to $4.45 Billion by the end of 2027. Beyond that, Simply Wall St extrapolates these trends and estimates that FCF could reach over $7.2 Billion a decade from now. These forward-looking estimates combine both analyst inputs for the next five years and longer-term, data-driven extrapolations for the years beyond.

Using the 2 Stage Free Cash Flow to Equity model, the DCF places Boston Scientific’s intrinsic fair value at $79.37 per share. However, the analysis indicates the stock is currently trading around 25% above this estimate, which suggests it is overvalued by DCF standards.

Result: OVERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Boston Scientific.

Our Discounted Cash Flow (DCF) analysis suggests Boston Scientific may be overvalued by 25.0%. Find undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Boston Scientific Price vs Earnings

For profitable companies like Boston Scientific, the Price-to-Earnings (PE) ratio is a preferred way to gauge value, since it tells you how much investors are paying for each dollar of current profits. Typically, companies with higher growth prospects or lower risk trade at higher PE ratios, while slower-growing or riskier businesses warrant a lower ratio.

Boston Scientific currently trades at a PE ratio of 58.7x, which is noticeably higher than both the medical equipment industry average of 29.1x and its group of peers at 38.2x. At first glance, this seems expensive, but the raw comparison does not consider how Boston Scientific compares in terms of future earnings growth, profitability, or risk profile.

That is where Simply Wall St’s proprietary Fair Ratio becomes relevant. The Fair Ratio, set at 35.9x for Boston Scientific, reflects what a reasonable PE should be for this company based on all the key factors affecting its true value, such as earnings growth trends, industry dynamics, profit margins, company size, and risk. This provides more insight than just comparing against peer or industry averages, since it tailors the benchmark to Boston Scientific’s specific situation.

With Boston Scientific’s actual PE at 58.7x compared to the Fair Ratio of 35.9x, shares appear overvalued on this basis.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Boston Scientific Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is your personalized story about where a company like Boston Scientific is headed, built from your own view on its growth, margins, and fair value, rather than relying solely on traditional valuation models. Narratives link what you believe about the business, such as new products, market opportunities, and challenges, to the numbers that matter. This helps you see how these beliefs translate into a financial forecast and a share price you think is fair. On Simply Wall St's Community page, millions of investors use Narratives because they are easy to create and update as new news, trends, or earnings data become available. By comparing your Narrative’s fair value to the current share price, you can make more confident decisions about whether to invest, hold, or sell, all with a clear understanding of the assumptions driving your call. For example, some Boston Scientific Narratives factor in rapid growth in advanced therapies and Asia Pacific, arriving at price targets as high as $140, while others focus on competition and regulatory risk, setting targets closer to $99. This shows just how much perspectives, and potential fair values, can differ.

Do you think there's more to the story for Boston Scientific? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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