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Here's Why You Should Hold on to Abiomed (ABMD) Stock For Now
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Abiomed, Inc. is well poised for growth in the coming quarters, backed by strength in its Impella product line. A robust fourth-quarter fiscal 2022 performance, along with a solid global foothold, is expected to contribute further. Third-party reimbursement and stiff competitive forces persist.
Over the past year, this Zacks Rank #3 (Hold) stock has lost 29.5% compared with 31.9% fall of the industry and the S&P 500’s 12.7% decline.
The renowned global provider of medical products designed to assist or replace the pumping function of the failing heart has a market capitalization of $10.24 billion. The company projects 25% growth for the next five years and expects to maintain its strong performance. It has delivered an earnings surprise of 7.9% for the past four quarters, on average.
Image Source: Zacks Investment Research
Let’s delve deeper.
Strength in Impella: Abiomed’s flagship product line, Impella, has continued to be a growth driver, which raises our optimism. The company is focused on achieving its fiscal 2021 Abiomed 2.0 goals, which will drive the rollout of its remote interface technology with SmartAssist and Impella Connect. The company continues to invest in its pipeline of advanced technologies, including the XR Sheath, Impella ECP, Impella Connect, Impella BTR and new AI algorithms. Abiomed’s newest heart pump, the Impella 5.5 with SmartAssist, has received FDA pre-market approval based on its safety and efficacy in the therapy of cardiogenic shock.
Solid Global Foothold: The Impella support has already been integrated in hospitals throughout Germany and Japan, raising our optimism. Outside the United States, Impella product revenues were strong year over year in fourth-quarter fiscal 2022. Japan and Europe product revenues were also strong compared with the prior-year quarter. Europe’s performance was driven by strength in Germany, Belgium and Italy. Abiomed’s European business also continued to benefit from sales mix, as the company fully transitions to Impella CP with SmartAssist. U.S. Impella product revenues reflected year-over-year rise on the back of a surge in patient utilization.
Strong Q4 Results: Abiomed’s solid fourth-quarter fiscal 2022 results buoy optimism. The company saw continued strength in its global Impella revenues. Abiomed’s progress regarding its Impella product line, like successfully treating the first Japanese patient with the Impella 5.5 with SmartAssist device and the number of patients treated globally with the Impella 5.5 with SmartAssist surpassing 5,000 in April, raises our optimism regarding the stock.
Downsides
Stiff Competition: Abiomed faces intense competition from other companies offering circulatory care products that are subject to rapid technological change and evolving industry requirements and standards. It competes with companies that have better resources. The company’s ability to compete effectively depends upon its expertise in distinguishing itself and its products from its competitors and their products.
Third-Party Reimbursement: Abiomed depends on third-party reimbursement to its customers for market acceptance of its products. Sales of medical devices largely depend on the reimbursement of patients’ medical expenses by government healthcare programs and private health insurers. Without government reimbursement or third-party insurers’ payments for patient care, the market for Abiomed’s products will be limited.
Estimate Trend
Abiomed is witnessing a negative estimate revision trend for 2022. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 0.2% south to $4.59.
The Zacks Consensus Estimate for the company’s first-quarter fiscal 2023 revenues is pegged at $277.1 million, suggesting a 9.7% improvement from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Omnicell, Inc. (OMCL - Free Report) and Masimo Corporation (MASI - Free Report) .
AMN Healthcare, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 1.1%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 15.6%.
AMN Healthcare has gained 4.8% against the industry’s 54.9% fall in the past year.
Omnicell, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 20%. OMCL’s earnings surpassed estimates in three of the trailing four quarters and missed the same in the other, the average beat being 13.4%.
Omnicell has lost 23.5% compared with the industry’s 60.9% fall over the past year.
Masimo, carrying a Zacks Rank #2 at present, has an earnings yield of 3.8% against the industry’s negative yield. MASI’s earnings surpassed estimates in the trailing four quarters, the average beat being 4.4%.
Masimo has lost 49.2% compared with the industry’s 31.9% fall over the past year.
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Here's Why You Should Hold on to Abiomed (ABMD) Stock For Now
Abiomed, Inc. is well poised for growth in the coming quarters, backed by strength in its Impella product line. A robust fourth-quarter fiscal 2022 performance, along with a solid global foothold, is expected to contribute further. Third-party reimbursement and stiff competitive forces persist.
Over the past year, this Zacks Rank #3 (Hold) stock has lost 29.5% compared with 31.9% fall of the industry and the S&P 500’s 12.7% decline.
The renowned global provider of medical products designed to assist or replace the pumping function of the failing heart has a market capitalization of $10.24 billion. The company projects 25% growth for the next five years and expects to maintain its strong performance. It has delivered an earnings surprise of 7.9% for the past four quarters, on average.
Image Source: Zacks Investment Research
Let’s delve deeper.
Strength in Impella: Abiomed’s flagship product line, Impella, has continued to be a growth driver, which raises our optimism. The company is focused on achieving its fiscal 2021 Abiomed 2.0 goals, which will drive the rollout of its remote interface technology with SmartAssist and Impella Connect. The company continues to invest in its pipeline of advanced technologies, including the XR Sheath, Impella ECP, Impella Connect, Impella BTR and new AI algorithms. Abiomed’s newest heart pump, the Impella 5.5 with SmartAssist, has received FDA pre-market approval based on its safety and efficacy in the therapy of cardiogenic shock.
Solid Global Foothold: The Impella support has already been integrated in hospitals throughout Germany and Japan, raising our optimism. Outside the United States, Impella product revenues were strong year over year in fourth-quarter fiscal 2022. Japan and Europe product revenues were also strong compared with the prior-year quarter. Europe’s performance was driven by strength in Germany, Belgium and Italy. Abiomed’s European business also continued to benefit from sales mix, as the company fully transitions to Impella CP with SmartAssist. U.S. Impella product revenues reflected year-over-year rise on the back of a surge in patient utilization.
Strong Q4 Results: Abiomed’s solid fourth-quarter fiscal 2022 results buoy optimism. The company saw continued strength in its global Impella revenues. Abiomed’s progress regarding its Impella product line, like successfully treating the first Japanese patient with the Impella 5.5 with SmartAssist device and the number of patients treated globally with the Impella 5.5 with SmartAssist surpassing 5,000 in April, raises our optimism regarding the stock.
Downsides
Stiff Competition: Abiomed faces intense competition from other companies offering circulatory care products that are subject to rapid technological change and evolving industry requirements and standards. It competes with companies that have better resources. The company’s ability to compete effectively depends upon its expertise in distinguishing itself and its products from its competitors and their products.
Third-Party Reimbursement: Abiomed depends on third-party reimbursement to its customers for market acceptance of its products. Sales of medical devices largely depend on the reimbursement of patients’ medical expenses by government healthcare programs and private health insurers. Without government reimbursement or third-party insurers’ payments for patient care, the market for Abiomed’s products will be limited.
Estimate Trend
Abiomed is witnessing a negative estimate revision trend for 2022. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 0.2% south to $4.59.
The Zacks Consensus Estimate for the company’s first-quarter fiscal 2023 revenues is pegged at $277.1 million, suggesting a 9.7% improvement from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Omnicell, Inc. (OMCL - Free Report) and Masimo Corporation (MASI - Free Report) .
AMN Healthcare, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 1.1%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 15.6%.
You can see the complete list of today’s Zacks #1 Rank stocks here.
AMN Healthcare has gained 4.8% against the industry’s 54.9% fall in the past year.
Omnicell, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 20%. OMCL’s earnings surpassed estimates in three of the trailing four quarters and missed the same in the other, the average beat being 13.4%.
Omnicell has lost 23.5% compared with the industry’s 60.9% fall over the past year.
Masimo, carrying a Zacks Rank #2 at present, has an earnings yield of 3.8% against the industry’s negative yield. MASI’s earnings surpassed estimates in the trailing four quarters, the average beat being 4.4%.
Masimo has lost 49.2% compared with the industry’s 31.9% fall over the past year.