There was a time when Medtronic (NYSE:MDT) would beat analyst earnings estimates quarter after quarter. After the market closed yesterday, Medtronic announced revenue increased 11% and earnings advanced 13% -- hardly bad news. But the company missed analyst estimates by a penny.

The stock is down 8% today. AP is reporting that five analysts (yes, five, so far!) have issued downgrades on the stock. Ah, but for Foolish investors, nothing is better than an unloved stock that has potential.

AP is quoting Piper Jaffray analyst Thom Gunderson as questioning why Medtronic's implantable cardioverter-defibrillators (ICDs) had only a 17% increase in sales for a market that was increasing 20%. That's a great question,and its answer will certainly bear on next quarter's results. But what is the long-term outlook?

Longtime Fool contributor Selena Maranjian recently noted Medicare's expanding coverage of ICDs. Medtronic has about 50% of a market that is approaching $5 billion in sales. There are competitors -- St. Jude Medical (NYSE:STJ) and Guidant (NYSE:GDT) -- and St. Jude is rapidly growing its ICD business. But, ICDs are growing at double-digit rates and gaining more Medicare attention.

Fool contributor Jeff Hwang was noting weak ICD sales back in February. But Jeff was also looking at Medtronic's drug-coated stent Endeavor, which is on track for European approval in early 2005 -- with the U.S. to follow later. Boston Scientific (NYSE:BSX) dominates this market, but Johnson & Johnson (NYSE:JNJ) also has a healthy piece. Although Medtronic has a partner, Abbott Laboratories (NYSE:ABT), this is a very big and very profitable market in Medtronic's future.

Investors need to weight Medtronic's worth as though it grows earnings at low double-digit rates -- a real possibility for the next two years (and below previous estimates). The stock is currently trading for 28 times earnings. That is rich for the earnings growth rate ahead. The stock has traded in a narrow range for the past 5 years, as its growth rate and price-to-earnings ratio narrowed.

In Medtronic's case, the analysts have this stock pegged correctly. It's not a buy. It's not a sell. Medtronic is slightly net cash positive. Competitors Guidant and St. Jude are solidly net cash positive -- and Johnson & Johnson is Fort Knox. Medtronic is the world's leading medical technology company, but it has many healthy competitors looking to keep its growth rate in check.

The Motley Fool is investors talking to investors. Discuss Medtronic and Boston Scientific -- and thousands of other stocks -- on the Motley Fool discussion boards.

Fool contributor W.D. Crotty owns stock in Medtronic and Boston Scientific -- and W.D. is stent-free.