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Abaxis Hurt by Dismal Q1 Results & Fierce Competition
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On Aug 26, 2016, we issued an updated research report on Abaxis, Inc. , which develops, manufactures, markets, and sells portable blood analysis systems. The stock currently carries a Zacks Rank #4 (Sell).
Abaxis’ first-quarter fiscal 2017 results disappointed us, with the company squarely missing the Zacks Consensus Estimate. Moreover, Abaxis faced a challenging year-over-year comparison in sales of veterinary rotors in the Asia Pacific region.
Abaxis faces fierce competition in both the Medical and Veterinary markets, wherein the company competes against firms that have substantially greater resources. The company competes primarily with commercial clinical laboratories, hospital clinical laboratories and manufacturers of bench top multi-test blood analyzers and other testing systems that health care providers can use on-site. Such severe competition may strain Abaxis’ top line in the future.
Abaxis mostly depends on distributors to sell its products as well as on sole distributor arrangements in a number of countries. For instance, Abbott has the exclusive right to sell and distribute Abaxis’ Piccolo Xpress chemistry analyzer and associated consumables in the professionally attended U.S. human healthcare market.
As a result, Abaxis no longer has control over the marketing and sale of its primary medical products in most of the U.S. medical markets and is wholly dependent upon the efforts and priorities of Abbott in promoting and creating demand for the same. Failure to successfully develop and maintain relationships with these distributors could thus adversely affect the company’s business.
On a brighter note, Abaxis continues to remain a strong player in the veterinary market, with solid sales from its veterinary business, which accounted for 82.7% of its total revenue in the first quarter and also witnessed a double-digit growth.
Moreover, Abaxis’ Piccolo system continued to excel in the market. Till date, Abaxis’ Piccolo remains the only point-of-care technology that can deliver comprehensive diagnostic grade chemistry results within the 15-minute visit window that the retailers target.
Stocks to Consider
Some of the better-ranked stocks in the broader medical sector are IDEXX Laboratories, Inc. (IDXX - Free Report) , Masimo Corporation (MASI - Free Report) and Natus Medical Inc. . All these stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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Abaxis Hurt by Dismal Q1 Results & Fierce Competition
On Aug 26, 2016, we issued an updated research report on Abaxis, Inc. , which develops, manufactures, markets, and sells portable blood analysis systems. The stock currently carries a Zacks Rank #4 (Sell).
Abaxis’ first-quarter fiscal 2017 results disappointed us, with the company squarely missing the Zacks Consensus Estimate. Moreover, Abaxis faced a challenging year-over-year comparison in sales of veterinary rotors in the Asia Pacific region.
Abaxis faces fierce competition in both the Medical and Veterinary markets, wherein the company competes against firms that have substantially greater resources. The company competes primarily with commercial clinical laboratories, hospital clinical laboratories and manufacturers of bench top multi-test blood analyzers and other testing systems that health care providers can use on-site. Such severe competition may strain Abaxis’ top line in the future.
Abaxis mostly depends on distributors to sell its products as well as on sole distributor arrangements in a number of countries. For instance, Abbott has the exclusive right to sell and distribute Abaxis’ Piccolo Xpress chemistry analyzer and associated consumables in the professionally attended U.S. human healthcare market.
As a result, Abaxis no longer has control over the marketing and sale of its primary medical products in most of the U.S. medical markets and is wholly dependent upon the efforts and priorities of Abbott in promoting and creating demand for the same. Failure to successfully develop and maintain relationships with these distributors could thus adversely affect the company’s business.
On a brighter note, Abaxis continues to remain a strong player in the veterinary market, with solid sales from its veterinary business, which accounted for 82.7% of its total revenue in the first quarter and also witnessed a double-digit growth.
Moreover, Abaxis’ Piccolo system continued to excel in the market. Till date, Abaxis’ Piccolo remains the only point-of-care technology that can deliver comprehensive diagnostic grade chemistry results within the 15-minute visit window that the retailers target.
Stocks to Consider
Some of the better-ranked stocks in the broader medical sector are IDEXX Laboratories, Inc. (IDXX - Free Report) , Masimo Corporation (MASI - Free Report) and Natus Medical Inc. . All these stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>