Boston Scientific (BSX)

Medical device company Boston Scientific (NYSE:BSX) reported Q3 CY2025 results beating Wall Street’s revenue expectations, with sales up 20.3% year on year to $5.07 billion. Guidance for next quarter’s revenue was better than expected at $5.27 billion at the midpoint, 1.7% above analysts’ estimates. Its non-GAAP profit of $0.75 per share was 5.1% above analysts’ consensus estimates.

Company Overview

Founded in 1979 with a mission to advance less-invasive medicine, Boston Scientific (NYSE:BSX) develops and manufactures medical devices used in minimally invasive procedures across cardiovascular, urological, neurological, and gastrointestinal specialties.

The medical devices industry operates a business model that balances steady demand with significant investments in innovation and regulatory compliance. The industry benefits from recurring revenue streams tied to consumables, maintenance services, and incremental upgrades to the latest technologies. However, the capital-intensive nature of product development, coupled with lengthy regulatory pathways and the need for clinical validation, can weigh on profitability and timelines. In addition, there are constant pricing pressures from healthcare systems and insurers maximizing cost efficiency. Over the next several years, one tailwind is demographic–aging populations means rising chronic disease rates that drive greater demand for medical interventions and monitoring solutions. Advances in digital health, such as remote patient monitoring and smart devices, are also expected to unlock new demand by shortening upgrade cycles. On the other hand, the industry faces headwinds from pricing and reimbursement pressures as healthcare providers increasingly adopt value-based care models. Additionally, the integration of cybersecurity for connected devices adds further risk and complexity for device manufacturers.

Boston Scientific's primary competitors include Medtronic plc (NYSE: MDT), Abbott Laboratories (NYSE: ABT), and Johnson & Johnson (NYSE: JNJ), along with specialized competitors in specific device categories such as Edwards Lifesciences (NYSE: EW) in heart valves and Stryker Corporation (NYSE: SYK) in certain surgical technologies.

Larger companies benefit from economies of scale, where fixed costs like infrastructure, technology, and administration are spread over a higher volume of goods or services, reducing the cost per unit. Scale can also lead to bargaining power with suppliers, greater brand recognition, and more investment firepower. A virtuous cycle can ensue if a scaled company plays its cards right.

With $19.35 billion in revenue over the past 12 months, Boston Scientific has decent scale. This is important as it gives the company more leverage in a heavily regulated, competitive environment that is complex and resource-intensive.

A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, Boston Scientific’s sales grew at a solid 13.9% compounded annual growth rate over the last five years. Its growth beat the average healthcare company and shows its offerings resonate with customers, a helpful starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. Boston Scientific’s annualized revenue growth of 18.6% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

Boston Scientific also reports organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, Boston Scientific’s organic revenue averaged 16.2% year-on-year growth. Because this number is lower than its two-year revenue growth, we can see that some mixture of acquisitions and foreign exchange rates boosted its headline results.

This quarter, Boston Scientific reported robust year-on-year revenue growth of 20.3%, and its $5.07 billion of revenue topped Wall Street estimates by 1.9%. Company management is currently guiding for a 15.5% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 11.4% over the next 12 months, a deceleration versus the last two years. We still think its growth trajectory is attractive given its scale and implies the market is baking in success for its products and services.

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Boston Scientific has done a decent job managing its cost base over the last five years. The company has produced an average operating margin of 14.6%, higher than the broader healthcare sector.

Analyzing the trend in its profitability, Boston Scientific’s operating margin rose by 8.6 percentage points over the last five years, as its sales growth gave it operating leverage. Zooming in on its more recent performance, we can see the company’s trajectory is intact as its margin has also increased by 2.2 percentage points on a two-year basis. These data points are very encouraging and show momentum is on its side.

In Q3, Boston Scientific generated an operating margin profit margin of 20.7%, up 3.3 percentage points year on year. This increase was a welcome development and shows it was more efficient.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Boston Scientific’s EPS grew at an astounding 19.8% compounded annual growth rate over the last five years, higher than its 13.9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into Boston Scientific’s earnings quality to better understand the drivers of its performance. As we mentioned earlier, Boston Scientific’s operating margin expanded by 8.6 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q3, Boston Scientific reported adjusted EPS of $0.75, up from $0.63 in the same quarter last year. This print beat analysts’ estimates by 5.1%. Over the next 12 months, Wall Street expects Boston Scientific’s full-year EPS of $2.95 to grow 10.3%.

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

Boston Scientific has shown impressive cash profitability, giving it the option to reinvest or return capital to investors. The company’s free cash flow margin averaged 12.8% over the last five years, better than the broader healthcare sector.

Taking a step back, we can see that Boston Scientific’s margin expanded by 3.7 percentage points during that time. This is encouraging because it gives the company more optionality.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? Enter ROIC, a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

Although Boston Scientific has shown solid business quality lately, it historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 5.6%, somewhat low compared to the best healthcare companies that consistently pump out 20%+.

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Over the last few years, Boston Scientific’s ROIC averaged 3 percentage point increases each year. its rising ROIC is a good sign and could suggest its competitive advantage or profitable growth opportunities are expanding.

Boston Scientific reported $1.39 billion of cash and $11.59 billion of debt on its balance sheet in the most recent quarter. As investors in high-quality companies, we primarily focus on two things: 1) that a company’s debt level isn’t too high and 2) that its interest payments are not excessively burdening the business.

With $5.81 billion of EBITDA over the last 12 months, we view Boston Scientific’s 1.8× net-debt-to-EBITDA ratio as safe. We also see its $317 million of annual interest expenses as appropriate. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

We enjoyed seeing Boston Scientific beat analysts’ organic revenue expectations this quarter. We were also glad its revenue guidance for next quarter exceeded Wall Street’s estimates. Overall, we think this was a solid quarter with some key areas of upside. The market seemed to be hoping for more, and the stock traded down 1.4% to $98.47 immediately after reporting.

Updated: December 3, 2025 at 11:00 PM EST

Before deciding whether to buy Boston Scientific or pass, we urge investors to consider business quality, valuation, and the latest quarterly results.

Boston Scientific possesses a number of positive attributes. First off, its revenue growth was solid over the last five years. Plus, Boston Scientific’s rising cash profitability gives it more optionality, and its astounding EPS growth over the last five years shows its profits are trickling down to shareholders.

Boston Scientific’s P/E ratio based on the next 12 months is 29.9x. At this valuation, there’s a lot of good news priced in. This is a good one to add to your watchlist - there are better opportunities elsewhere at the moment.

Wall Street analysts have a consensus one-year price target of $126.48 on the company (compared to the current share price of $99.58).