NEW YORK (TheStreet) -- Boston Scientific (BSX) shares are down 0.53% to $13.21 on Monday, the first day of federal trials over claims that its transvaginal mesh device caused injuries to women across the country.
The company's Obtryx and Pinnacle devices, which are used to treat stress urinary incontinence and pelvic organ prolapse respectively, are under scrutiny in two different trials today as four women from West Virginia and a woman in Miami are the first plaintiffs, of over 23,000 who have sued the company over the faulty devices, to go to trial.
The plaintiffs in the trials say that the devices were poorly designed and used substandard material causing infections, bleeding and nerve damage to the women who used them.
Boston Scientific along with Johnson & Johnson (JNJ) and C.R. Bard (BCR) face over 72,000 claims related to the devices in what has become one of the largest civil cases over a medical device in history.
TheStreet Ratings team rates BOSTON SCIENTIFIC CORP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate BOSTON SCIENTIFIC CORP (BSX) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and increase in stock price during the past year. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- BSX's revenue growth has slightly outpaced the industry average of 3.7%. Since the same quarter one year prior, revenues slightly increased by 6.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- BOSTON SCIENTIFIC CORP has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, BOSTON SCIENTIFIC CORP continued to lose money by earning -$0.08 versus -$2.87 in the prior year. This year, the market expects an improvement in earnings ($0.83 versus -$0.08).
- This stock has managed to rise its share value by 12.64% over the past twelve months. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
- BSX's debt-to-equity ratio of 0.63 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.81 is weak.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Health Care Equipment & Supplies industry and the overall market, BOSTON SCIENTIFIC CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full analysis from the report here: BSX Ratings Report