Boston Scientific scores 68 for management and 93 for moat. The management score rests on a return on invested capital of 8.8% and a gross margin of 69.0% — figures that describe a business earning a respectable return on what it employs. Debt sits at 0.51x equity. A wide moat alongside strong management is a combination worth understanding before the price matters at all.
Three independent anchors set the price worth paying. Growth is modelled at 15.0% a year, the rate measured from the filings. The exit multiple assumed is 30.0x. That produces an intrinsic value of $73.80, a 10-CAP price of $26.24 and a payback time price of $41.42, with the value zone set at the highest of the three, $41.42. Today's price of $43.23 sits 4% above it.
A wonderful business at the wrong price is still the wrong price. Boston Scientific scores well on the business and poorly on the entry point, which is the most common shape in a long bull market.
| Price | $43.23 |
| Market cap | $64.3B |
| P/E ratio | 17.6x |
| Return on invested capital | 8.8% |
| Gross margin | 69.0% |
| Debt to equity | 0.51x |
| Free cash flow yield | 2.6% |
| Growth rate used | 15.0% |
| Growth rate measured | 15.0% |
| Exit multiple assumed | 30.0x |
| Company | Moat | Buy price |
| Edwards Lifesciences (EW) | 81 | $28.50 |
| Dexcom Inc. (DXCM) | 98 | $60.76 |
| GE HealthCare Technologies (GEHC) | 23 | $23.16 |
| Stryker Corporation (SYK) | 93 | $175.37 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of Boston Scientific rather than accepting ours.