Boston Scientific: A Dip in the Improbability Drive

The universe, as anyone who’s accidentally looked at it knows, is a profoundly peculiar place. And so it was this Wednesday that shares of Boston Scientific (BSX 15.23%) experienced a gravitational anomaly – a 16% drop, to be precise – following what, by all rational accounts, was a perfectly acceptable quarterly earnings report. The company, dedicated to the fascinatingly complex business of keeping people internally functional, managed a 16% sales increase and a 14% boost in adjusted earnings per share. Not bad, really. Except, apparently, not quite good enough for the market’s exacting standards. It’s a bit like presenting the universe with a slightly imperfect sphere; it’ll acknowledge it, but it won’t be thrilled. (The universe, you see, has a thing about perfect spheres. Don’t ask.)

A Momentary Lapse in Exponential Expectations?

The market, it seems, had pre-ordained Boston Scientific to deliver guidance so spectacular it would bend the very fabric of spacetime. And when it didn’t quite manage that – falling a minuscule distance short of expectations for Q1 and 2026 – a collective sigh of disappointment rippled through the trading floors. It’s as if everyone was expecting a perpetual motion machine and got a very efficient, but ultimately finite, engine. (Which, let’s be honest, is still quite an achievement. Perpetual motion is notoriously difficult to achieve, mostly because of the laws of thermodynamics, and also because cats keep interfering.)

However, before we declare a crisis of cosmic proportions, let’s consider the facts. Boston Scientific isn’t simply growing; it’s exhibiting a rather persistent tendency towards expansion. Specifically:

They’ve managed an 18% increase in sales within their core cardiovascular division. Which, if you think about it, is a considerable number of hearts being kept reasonably happy.
Revenue in their medical-surgical unit is up 12%. A testament to their dedication to fixing things that are, well, broken.
They’ve achieved sales growth exceeding 12% across all geographical locations. This suggests they’re not just good at what they do, but good at doing it everywhere.
They continue to develop a broad pipeline of technologies, which, in the long run, is rather crucial for continued existence.
The planned acquisition of Penumbra could reinforce their vascular tech solutions. (Though one does wonder if Penumbra will be happy about being acquired. Acquisitions are rarely pleasant for the acquiree.)
They’re projecting sales growth of 11.25% in 2026. Which, while not quite warp speed, is certainly a respectable pace.
And, perhaps most impressively, they anticipate generating $4.2 billion in free cash flow in 2026, up from $3.7 billion this year. (Cash flow, you see, is the lifeblood of any enterprise. Without it, things tend to… cease functioning.)

Currently trading at 28 times forward free cash flow, Boston Scientific isn’t outrageously priced, particularly given its consistent double-digit sales growth over the past 12 quarters. It’s a company that demonstrably invests in innovation – having completed roughly 40 acquisitions in the last decade, with around 45 active venture capital investments, and over 65 ongoing trials. (This suggests they’re not planning on slowing down anytime soon. Which, from a purely strategic perspective, is rather sensible.)

While a one-penny miss on EPS guidance for Q1 and 2026 might cause a momentary ripple in the markets, it seems a rather disproportionate reaction for investors with a decade-long horizon. (It’s a bit like getting upset because your spaceship is off course by a millimeter during a voyage to another galaxy. It’s technically a deviation, but hardly a catastrophe.) Given Boston Scientific’s historical annualized total returns of 18% over the last decade, a dip in the share price appears less like a fundamental crisis and more like a rather tempting opportunity. In the grand scheme of things, and the universe being what it is, it’s a perfectly logical time to consider buying the dip.

2026-02-04 21:18

A Momentary Lapse in Exponential Expectations?

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