#6: Edwards Lifesciences
Although it’s an S&P 500 component and a healthcare player valued at almost $8 billion, Edwards Lifesciences (EW) isn’t really a household name. So if you’re unfamiliar, the company produces devices to treat structural heart disease including synthetic valves and related tools to repair diseased hearts.
It’s a noble mission, and with heart disease as America’s No. 1 killer, you would think that EW would be doing just fine. But unfortunately, in April the company posted an ugly outlook on slower sales that caused a decline of more than 20% in one session — the worst one-day flop since the dot-com days right after its IPO.
The fact that Edwards guided down sales and profits so much was bad enough, but before the crash and burn it was trading for more than 30 times forward earnings … and when a stock trading for a high multiple misses the mark, the fall from grace can be fierce.
Edwards seems to have stabilized and regrouped, and continues to expand its approved uses for various valves. However, companies like Medtronic (MDT) are trying to compete and undercut on price, and there’s no guarantee that Edwards won’t suffer further sales trouble — and further stocks declines as a result.