Is Boston Scientific Stock Riskier Than It Was A Year Ago

Investors in Boston Scientific (BSX) hold stakes in a medical device maker that grew revenue 13.5% over the twelve months to June 2026. Yet the shares have lost 54.7% over the past year, trailing a 17.3% gain for the S&P 500. In August, a cyberattack disrupted the company's manufacturing and order shipments. So has the risk in holding Boston Scientific shares gone up or down over the past year?

Riskier: Capital Spending Is Now Above Research Spending

The risk has indeed increased, and the evidence appears in how Boston Scientific spends its cash. Over the twelve months to June 2026, capital spending reached $2.72 billion. This outlay exceeded the $2.15 billion allocated to research over the same months. Prior to this, research spending had been the larger of the two at every quarter end since at least September 2011, a streak of 59 in a row.

The higher capital spending left the company with less free cash flow. Over the twelve months to June 2026, free cash flow totaled $1.81 billion, down from $3.18 billion a year earlier. Debt rose modestly during the same period: total debt stood at $12.6 billion at the end of June 2026, compared with $12.0 billion a year earlier.

Most Of The Extra Spending Came In One Quarter

Boston Scientific's capital spending in April to June 2026 reached $1.93 billion, compared with $245 million in the same quarter a year earlier. Capital spending in that one quarter alone was larger than in the whole twelve months to June 2025.

The underlying business kept growing through that quarter. Revenue rose 7.5% from a year earlier, and operating margin widened to 22.9%, up from 18.6% a year earlier. Cash from operations over the twelve months to June 2026 also increased, reaching $4.53 billion from $4.29 billion. So the drop in free cash flow came from what Boston Scientific spent, not from what it earned.

A Thinner Cushion For A Bad Quarter

For shareholders, the existing debt still looks manageable, but the company now generates less spare cash to absorb a bad quarter. Operating income over the twelve months to June 2026 covered interest expense 12.1 times. Yet free cash flow in April to June 2026 was negative $451 million, compared with a positive $1.04 billion a year earlier.

The broader outlook has weakened as well. On July 29, management lowered its 2026 revenue growth forecast to 6.0% at the midpoint, down from 7.8% in its April release. In September, the company said the cyberattack was likely to have a material impact on its third-quarter and full-year 2026 results. The company's next report, expected on or around October 28, 2026, will cover the quarter the attack hit.

A year ago, investors could assume Boston Scientific's research spending ran ahead of its capital spending. That is no longer the case. If capital spending in the July-to-September quarter falls back below research spending in that quarter, the April-to-June outlay looks like a one-off, and the risk should ease. If capital spending stays above research spending, the outlay looks like a new pace of spending, and the thinner free cash flow remains.

Does This Mean You Should Act On BSX?

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