It has been about a month since the last earnings report for Boston Scientific (BSX). Shares have lost about 4% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Boston Scientific due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Boston Scientific Q4 Earnings Beat Estimates, Gross Margin Contracts

Boston Scientific posted fourth-quarter 2024 adjusted earnings per share of 70 cents, up 27.3% from the year-ago figure. The figure beat the Zacks Consensus Estimate by 7.7% and also exceeded the company’s adjusted earnings per share guidance range of 64-66 cents per share.

The quarter’s adjustments included certain amortization expenses, acquisition/divestitures-related net charges, and restructuring and restructuring-related charges, among others. Reported earnings per share for the fourth quarter was 38 cents, reflecting an 11.8% increase from the year-ago quarter figure.

Full-year adjusted earnings per share of $2.51 rose 22.4% from the year-ago figure. It also exceeded the Zacks Consensus Estimate by 2%. It also surpassed the full-year adjusted earnings per share guidance of $2.45 to $2.47.

Revenues in the fourth quarter totaled $4.56 billion, up 22.4% year over year on a reported basis and 23.1% on an operational basis (at a constant exchange rate or CER). Organic growth, adjusted for foreign currency fluctuations and certain recent acquisitions and divestments, was 19.5%.

The top line surpassed the Zacks Consensus Estimate by 3.4% and exceeded the company’s forecast of 16.5% reported growth and 15% on an organic basis.

Full-year total revenues were $16.75 billion, up 17.6% on a reported basis from 2023 (an 18.5% improvement on an operational basis and up 16.4% on an organic basis). The top line also exceeded the Zacks Consensus Estimate by 0.9%.

It also surpassed the company’s full-year net sales growth expectation of approximately 16.5% on a reported basis and 15% organically.

Q4 Revenue Breakdown by Regions

In the fourth quarter, revenues rose 30.7% in the United States on a reported basis (same operationally).

Reported revenues rose 10.8% in the Europe, Middle East and Africa (EMEA) region (up 11.6% operationally) and 11.1% in the Asia Pacific zone (up 12.4% operationally).

Reported revenues increased 4.6% in Latin America and Canada (up 12.6% operationally). Reported revenue growth in emerging markets was 12.4% (up 15.2% operationally).

Segmental Analysis

Boston Scientific recently reorganized its operational structure and aggregated its core businesses into two reportable segments — MedSurg and Cardiovascular. Both of these generate revenues from the sale of Medical Devices.

MedSurg

Within this, the Endoscopy unit generated revenues of $690 million, up 7% organically.

Urology revenues were $630 million, reflecting organic growth of 7.9%.

The Neuromodulation business reported $299 million in revenues, highlighting a 5.5% rise organically year over year.

Cardiovascular

The company generates maximum revenues from this segment. Within this, Cardiology business sales totaled $2.30 billion (up 31.9% year over year organically) in the fourth quarter.

The Peripheral Interventions unit generated $645 million in sales, up 12.5%.

Margin Performance

The gross margin in the fourth quarter contracted 138 basis points (bps) year over year to 67.9%. There was a 27.9% rise in the cost of products sold to $1.47 billion in the reported quarter.

Selling, general and administrative expenses rose 16.9% to $1.62 billion. Research and development expenses rose 26.7% to $460 million. Royalty expenses of $10 million, however, declined 16.7% year over year. The adjusted operating margin expanded 6 bps to 22.2% in the reported quarter.

BSX Initiates Outlook for 2025 and Q1

For 2025, Boston Scientific anticipates net sales to grow approximately 12.5-14.5% on a reported basis and nearly 10-12% on an organic basis. The Zacks Consensus Estimate is currently pegged at $18.77 billion, indicating a 13.1% rise from the 2023 reported figure.

Full-year adjusted earnings per share is expected in the range of $2.80-$2.87. The Zacks Consensus Estimate is currently pegged at $2.77.

For the first quarter of 2025, revenue growth is projected in the range of approximately 17-19% on a reported basis (up 14-16% organically). Adjusted earnings are expected in the range of 66-68 cents per share.

The Zacks Consensus Estimate for first-quarter earnings and revenues is pegged at 64 cents per share and $4.42 billion, respectively.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision.

VGM Scores

Currently, Boston Scientific has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Boston Scientific has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

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This article originally published on Zacks Investment Research (zacks.com).

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