We find Baxter International to be extremely undervalued versus Boston Scientific. Here are the factors we considered:
P/S Ratio
BAX's P/S multiple of 3.6x is
substantially lower than the figure of 5.2x for BSX
Revenue Growth
Over the last twelve months, Baxter International has seen revenues change by 3.4% -
higher than the figure of -2.7% for Boston ScientificIn the twelve-month period before that, revenues for Baxter International had changed by 0.7% -
lower than the 7.5% change for Boston Scientific
Operating Margin
Baxter International's operating margin was 6.7% for the most recent twelve-month period, which is
higher than Boston Scientific's operating margin of 0.8%Over the last twelve months, the operating margin for Baxter International changed by 7.1 pp (percentage points) -
much better than the change of -14.9 pp for Boston ScientificIn the twelve-month period before that, the operating margin for Baxter International had changed by -0.8 pp -
roughly around the change of 0.1 pp for Boston Scientific over the same period
Baxter International Boston Scientific Valuation: Current Market Cap $42 Bil $53 Bil Current P/S Multiple 3.6x 5.2xBaxter International substantially lower Revenues: Total Revenue (LTM) $12 Bil $10 Bil LTM Revenue Growth (Current) 3.4% -2.7%Baxter International higher LTM Revenue Growth (Year-ago) 0.7% 7.5%Baxter International lower Operating Income/Margin: Operating Income (LTM) $771 Mil $78 Mil Operating Margin (LTM) 6.7% 0.8%Baxter International higher LTM Margin Change (Current) 7.1 pp -14.9 ppBaxter International much better LTM Margin Change (Year-ago) -0.8 pp 0.1 ppSimilar for both companies