QS Research · Michael Burry's Scion Capital analyst template · 2006
BOSTON SCIENTIFIC CORP (BSX)
As of 2026-11-09 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case +0% · downside -10% · upside +10%
On TTM to Sep 30, 2026, 12.0x EV/EBITDA (N27) on $5.36B EBITDA (N15) gives EV $64.32B; less $0.435B net debt (N23) over 1,449.47M shares (N5) is $44.07, essentially the $44.02 close (N1). A 10% EBITDA haircut to $4.82B gives $39.64 (-10.0%), while a 10% recovery to $5.90B gives $48.51 (+10.2%), all at today's multiple. The market is pricing the Q3 2026 organic miss, cyber disruption and guidance cuts (S31, S29), and the stock's 12.0x EV/EBITDA and 18.2x P/E are below profitable peers (S1), but the near-term earnings trend is still falling and the sources give no dated non-valuation catalyst for multiple expansion. That makes this a watch, not a long: the cash generation and balance sheet are attractive, but the +30% base-case threshold is not met.
Key numbers
- Share price: $44.02
- Market cap: $63.81B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $21.07B
- EV / EBITDA (TTM): 12.0x
- P/E (TTM): 18.2x
- Price / book: 2.49x
The 15 boxes
- ✓ 1. Long-form business notes
The supplied record describes a medical-device business whose products are bought principally by hospitals, physicians and other providers that bill third-party payers; international net sales were 36% of global net sales in 2025. FY2025 revenue was $20.07B, operating income $3.61B, net income to common $2.90B and operating cash flow $4.53B, versus FY2020 revenue of $9.91B, an operating loss of $80.0M and a net loss to common of $115.0M. The oldest supplied Item 1 begins with COVID-19 risk, while the latest supplied excerpt begins with economic, industry and geopolitical risk and discloses $11.436B of debt at December 31, 2025.
- ✓ 2. Competitive advantage
BSX competes in markets it describes as having "significant competition" from large multi-line manufacturers, single-product device makers, low-cost entrants, Chinese local suppliers and non-device alternative therapies, and it says managed care and tenders force it to compete on price as well as clinical differentiation - so no pricing moat. What the numbers show is scale economics rather than a licence or switching-cost franchise: revenue grew from $9.91B (FY2020) to $20.07B (FY2025), gross profit from $6.45B to $13.85B, operating income from -$80.0M to $3.61B and operating cash flow from $1.51B to $4.53B. The durable advantages it can point to are procedure-level franchise positions (WATCHMAN called the leading device in percutaneous LAAC globally; FARAPULSE now the predominant part of Electrophysiology revenue) and a 127-country direct sales footprint, not patents - the 10-K says no single patent is material to the business as a whole.
- ✓ 3. 10-Q takeaways
Q3 2026 was a stalled quarter: net sales $5.138 billion, up only 1.5% reported, operational and organic (0.0% FX), with management attributing the disruption to the August 2026 cybersecurity incident plus EP competition and a decelerating LAAC market. GAAP net income attributable to common stockholders fell 22.9% to $582 million ($0.40 diluted) and adjusted EPS fell to $0.73 from $0.75, on a gross margin drop to 66.7% from 69.9% and one-off charges (litigation $81 million, restructuring $63 million, impairment $39 million). Nine-month sales were $15.784 billion (+6.7% reported, +5.8% organic) and nine-month net income of $2.830 billion was flattered by a $383 million discrete tax benefit booked in Q1 2026. Guidance now calls for FY2026 reported growth of ~4.25% and adjusted EPS of $3.16-$3.18, with Q4 2026 sales guided down 3.0% to 1.0%.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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