It was a dreadful day for investors in Edwards Lifesciences (EW 0.41%). The company announced after the market closed on Monday that it missed sales forecasts for the third quarter. The stock opened Tuesday morning nearly 18% lower -- the worst drop for Edwards since 2000.

What happened
Management originally projected that third-quarter sales would come in between $465 million and $485 million. The company now estimates that the actual number will be $448 million.  How did they get it so wrong?

Edwards Chairman and CEO Michael Mussallem pointed to three factors in a public statement, all of which relate to transcatheter heart valves. The first factor, according to Mussallem, is that European austerity measures resulted in fewer procedures being performed. Nearly 32% of revenue in the first half of 2012 came from Europe.

The second factor cited was that a decision allowing U.S. reimbursement for inoperable patients without femoral access was delayed. Edwards expected a clinical protocol allowing this reimbursement to be made earlier. The company now says that the decision is only a few weeks away.

Mussallem's third reason for the sales miss related to seasonality. Procedures for the transcatheter heart valve require a full Heart Team to be present. Summer vacations took a bigger toll on revenue, since any absence from a member of the medical team resulted in delays for procedures.

Looking ahead
It appears that the only things Edwards Lifesciences needs to do to correct the problems are to find more money for European governments, make the U.S. government function more timely, and keep doctors from taking vacations. Those issues can be easily solved, right?

The company maintains that it will still hit full-year sales guidance despite the horrible miss in third quarter. Mussallem said that approval from the Food and Drug Administration for use of the SAPIEN heart valves in treating high-risk patients, combined with the recent addition of Edwards' 29 millimeter heart valve, will allow the company to reach more patients, thereby pumping up sales.

Not everyone is so optimistic. JPMorgan Chase told its clients that "the competitive landscape will only get tougher over the next six to to 12 months." The firm referenced two companies that plan to launch competing heart valves soon -- St. Jude Medical (STJ) and Boston Scientific (BSX 1.39%).

Edwards also battles with Medtronic (MDT 0.29%) both in the medical-device market -- and in the courtroom. The two companies skirmished several times in recent years over patent disputes. 

Foolish take
Just days ago, Edwards Lifesciences was up more than 50% for the year. Any hiccup would have likely resulted in at least a modest correction. However, a drop in the vicinity of 18% goes beyond a modest correction.

Mussallem is probably correct that FDA approval expected by the company will increase sales. Despite the bad miss in third quarter, he likely has enough reasons to warrant confidence that full-year targets will be achieved.

On the other hand, JPMorgan Chase's warning about increased competition is also correct. 2014 looks to be a more difficult year for Edwards Lifesciences.

Value investors won't find a bargain with this stock even after the one-day plunge. Edwards still sports a forward price-to-earnings multiple that's more than 25. 

Growth investors, though, might want to look at taking advantage of the setback. The company still seems poised for future growth, although perhaps not as exuberantly as in the past. While the stock had a dreadful day, Edwards' best days are probably still ahead of it.