Medical device company Boston Scientific (NYSE:BSX) reported Q4 CY2024 results beating Wall Street’s revenue expectations, with sales up 22.4% year on year to $4.56 billion. Guidance for next quarter’s revenue was optimistic at $4.55 billion at the midpoint, 2.5% above analysts’ estimates. Its non-GAAP profit of $0.70 per share was 6.6% above analysts’ consensus estimates.
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Boston Scientific (BSX) Q4 CY2024 Highlights:
- Revenue: $4.56 billion vs analyst estimates of $4.42 billion (22.4% year-on-year growth, 3.3% beat)
- Adjusted EPS: $0.70 vs analyst estimates of $0.66 (6.6% beat)
- Revenue Guidance for Q1 CY2025 is $4.55 billion at the midpoint, above analyst estimates of $4.44 billion
- Adjusted EPS guidance for the upcoming financial year 2025 is $2.84 at the midpoint, beating analyst estimates by 0.8%
- Operating Margin: 14.8%, in line with the same quarter last year
- Organic Revenue rose 19.5% year on year (13.6% in the same quarter last year)
- Market Capitalization: $152.6 billion
"2024 was one of the best years in the history of Boston Scientific, fueled by our innovative portfolio, the launch of our FARAPULSE™ Pulsed Field Ablation System as well as significant clinical achievements and commercial excellence across businesses and regions," said Mike Mahoney, chairman and chief executive officer, Boston Scientific.
Company Overview
Founded in 1979, Boston Scientific (NYSE:BSX) is a medical device company that designs, manufactures, and sells a wide range of technologies used in minimally-invasive medical procedures.
Medical Devices & Supplies - Diversified
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.
Sales Growth
A company’s long-term sales performance signals its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, Boston Scientific grew its sales at a decent 9.3% compounded annual growth rate. Its growth was slightly above the average healthcare company and shows its offerings resonate with customers.
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 14.9% over the last two years is above its five-year trend, suggesting its demand 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 14.4% year-on-year growth. Because this number aligns with its normal revenue growth, we can see the company’s core operations (not acquisitions and divestitures) drove most of its results. 
This quarter, Boston Scientific reported robust year-on-year revenue growth of 22.4%, and its $4.56 billion of revenue topped Wall Street estimates by 3.3%. Company management is currently guiding for a 18% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 11.9% over the next 12 months, a slight 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.
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Adjusted Operating Margin
Adjusted operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies because it excludes non-recurring expenses, interest on debt, and taxes.
Boston Scientific has been an efficient company over the last five years. It was one of the more profitable businesses in the healthcare sector, boasting an average adjusted operating margin of 24.9%.
Looking at the trend in its profitability, Boston Scientific’s adjusted operating margin rose by 7.2 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 1.4 percentage points on a two-year basis. These data points are very encouraging and shows momentum is on its side.
in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
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 remarkable 9.6% annual EPS growth over the last five years aligns with its revenue performance. This tells us its incremental sales were profitable.
In Q4, Boston Scientific reported EPS at $0.70, up from $0.55 in the same quarter last year. This print beat analysts’ estimates by 6.6%. Over the next 12 months, Wall Street expects Boston Scientific’s full-year EPS of $2.51 to grow 12%.
Key Takeaways from Boston Scientific’s Q4 Results
We were impressed by how significantly Boston Scientific blew past analysts’ organic revenue expectations this quarter. We were also glad its EPS guidance for next quarter outperformed Wall Street’s estimates. Zooming out, we think this was a solid quarter. The stock remained flat at $103.92 immediately following the results.
Indeed, Boston Scientific had a rock-solid quarterly earnings result, but is this stock a good investment here? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.