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Medical Instrument Stocks Head-to-Head: Abiomed vs. STERIS
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Medical Instrument bigshots — Abiomed Inc. and STERIS plc (STE - Free Report) — are pitted against each other in the prospective U.S. MedTech space, which is estimated to reach $343 billion by 2021 at a CAGR of 4.6% (per Lucintel). Notably, these companies benefit from R&D innovation, increasing consolidation and the recent tax abatement.
Having similar business models, it often becomes difficult to decide which investment option is better. Further, as things stand now, the scales apparently look evenly balanced as the companies carry a Zacks Rank #2 (Buy).
Thus, here we take a detailed look at the fundamentals of these companies to determine which stock is currently positioned better in the Medical Instruments space.
Detailed Analysis
With a market cap of $13.3 billion, Abiomed is engaged in developing, manufacturing and marketing of medical products, designed to assist or replace the pumping function during heart failures.
STERIS develops, manufactures and markets infection prevention, decontamination, microbial reduction, as well as surgical and gastrointestinal support products and services. The company has a market cap of $8 billion
Price Performance: While the companies have outperformed the industry (up 15.4%) in the past year, Abiomed’s shares have fared better. In fact, Abiomed’s price performance is expected to improve as the latest developments signify probabilities of the company's penetration into the prophylactic high-risk PCI and cardiogenic shock patient market.
Abiomed’s shares surged 136.2% in the last 12 months, higher than the 34.5% rally of STERIS.
Consequently, Abiomed wins over STERIS when price performance is to be considered.
Earnings Growth Projections: For Abiomed, the Zacks Consensus Estimate for 2018 is pegged at $2.29 per share, representing year-over-year growth of 95.7%. The stock has long-term expected earnings growth rate of 31.5%. For STERIS, the Zacks Consensus Estimate is pegged at $4.13 for fiscal 2018, reflecting a year-over-year increase of 9.8%.
Abiomed wins another round.
Sales Growth Projections: For Abiomed, the Zacks Consensus Estimate for sales is pegged at $168.9 million for the next quarter, reflecting 27.6% rise from the prior year. For STERIS, the consensus estimate for sales is projected at $646.7 million for the next quarter, indicating a rise of almost 6.4% year over year.
Abiomed has an edge here as well.
What’s Driving Abiomed?
Abiomed’s extensive product portfolio and robust demand for its Impella line of products will continue to serve as key growth catalysts over the next several years.
Impella, Abiomed’s flagship product line, has consistently been a growth driver. Impella is the world's smallest heart pump. It is a support system of percutaneous, catheter-based devices offering hemodynamic support to the heart.
The platform reflects stellar performance in the third quarter. In the United States, the PCI and cardiogenic shock indications established new quarterly records. The company’s Impella adoption increased a total of 9% of the 121,000 high-risk PCI and 100,000 emergency patients. It was driven by the company’s clinical benefits and previous FDA approvals.
Outside the United States, revenues from Impella heart pumps totaled $17.3 million and was up 94% year over year, predominantly from Germany, which recorded $11.4 million, up 71%. Additionally, the Company recorded $1.1 million in revenues from Japan.
In third-quarter fiscal 2018, the company delivered some breakthroughs in terms of record earnings and revenue growth. Per management, operational excellence and discipline helped the company achieve the highest gross and operating margins to date.
The bulk of STERIS’ revenues are obtained from the healthcare and pharmaceutical industries. Growth in these industries is primarily driven by aging global population, as an increasing number of individuals are entering their prime healthcare consumption years.
Further, these industries are dependent upon advancement in healthcare delivery, acceptance of new technologies, government policies and general economic conditions. With increasing global life expectancy, a larger aging population increases the demand for medical procedures. This, in turn, translates into higher consumption of single use medical devices and surgical kits processed by STERIS.
Considering the consistent success achieved by the company in offering varied medical equipment to its customers, we believe that STERIS holds huge potential to expand its foothold in these industries.
The current macroeconomic environment across the globe has affected STERIS’ financial operations. Governments and insurance companies continue to look for ways to contain the rising cost of healthcare.
This might put pressure on players in the healthcare industry, STERIS being no exception. Increases in prices or lesser availability of raw materials as well as oil and gas might impair STERIS’ procurement of necessary materials for product manufacture.
The company competes for pharmaceutical, research and industrial customers against several players that have robust product portfolios and global reach as well as a number of small companies with limited product offerings and operations in one or a few countries.
Our comparative analysis indicates that Abiomed is positioned better than STERIS, considering price performance, earnings growth expectations and sales expectations.
Key Picks
A few other top-ranked players in the broader medical sector are Abaxis, Inc. and Edwards Lifesciences Corp. (EW - Free Report) .
Abaxis, a Zacks Rank #2 stock, has a long-term earnings growth rate of 5.1%.
Edwards Lifesciences has a long-term expected earnings growth rate of 15.1%. The stock has a Zacks Rank of #2.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Medical Instrument Stocks Head-to-Head: Abiomed vs. STERIS
Medical Instrument bigshots — Abiomed Inc. and STERIS plc (STE - Free Report) — are pitted against each other in the prospective U.S. MedTech space, which is estimated to reach $343 billion by 2021 at a CAGR of 4.6% (per Lucintel). Notably, these companies benefit from R&D innovation, increasing consolidation and the recent tax abatement.
Having similar business models, it often becomes difficult to decide which investment option is better. Further, as things stand now, the scales apparently look evenly balanced as the companies carry a Zacks Rank #2 (Buy).
Thus, here we take a detailed look at the fundamentals of these companies to determine which stock is currently positioned better in the Medical Instruments space.
Detailed Analysis
With a market cap of $13.3 billion, Abiomed is engaged in developing, manufacturing and marketing of medical products, designed to assist or replace the pumping function during heart failures.
STERIS develops, manufactures and markets infection prevention, decontamination, microbial reduction, as well as surgical and gastrointestinal support products and services. The company has a market cap of $8 billion
Meanwhile, you can see the complete list of today’s Zacks #1 Rank stocks here.
Price Performance: While the companies have outperformed the industry (up 15.4%) in the past year, Abiomed’s shares have fared better. In fact, Abiomed’s price performance is expected to improve as the latest developments signify probabilities of the company's penetration into the prophylactic high-risk PCI and cardiogenic shock patient market.
Abiomed’s shares surged 136.2% in the last 12 months, higher than the 34.5% rally of STERIS.
Consequently, Abiomed wins over STERIS when price performance is to be considered.
Earnings Growth Projections: For Abiomed, the Zacks Consensus Estimate for 2018 is pegged at $2.29 per share, representing year-over-year growth of 95.7%. The stock has long-term expected earnings growth rate of 31.5%. For STERIS, the Zacks Consensus Estimate is pegged at $4.13 for fiscal 2018, reflecting a year-over-year increase of 9.8%.
Abiomed wins another round.
Sales Growth Projections: For Abiomed, the Zacks Consensus Estimate for sales is pegged at $168.9 million for the next quarter, reflecting 27.6% rise from the prior year. For STERIS, the consensus estimate for sales is projected at $646.7 million for the next quarter, indicating a rise of almost 6.4% year over year.
Abiomed has an edge here as well.
What’s Driving Abiomed?
Abiomed’s extensive product portfolio and robust demand for its Impella line of products will continue to serve as key growth catalysts over the next several years.
Impella, Abiomed’s flagship product line, has consistently been a growth driver. Impella is the world's smallest heart pump. It is a support system of percutaneous, catheter-based devices offering hemodynamic support to the heart.
The platform reflects stellar performance in the third quarter. In the United States, the PCI and cardiogenic shock indications established new quarterly records. The company’s Impella adoption increased a total of 9% of the 121,000 high-risk PCI and 100,000 emergency patients. It was driven by the company’s clinical benefits and previous FDA approvals.
Outside the United States, revenues from Impella heart pumps totaled $17.3 million and was up 94% year over year, predominantly from Germany, which recorded $11.4 million, up 71%. Additionally, the Company recorded $1.1 million in revenues from Japan.
In third-quarter fiscal 2018, the company delivered some breakthroughs in terms of record earnings and revenue growth. Per management, operational excellence and discipline helped the company achieve the highest gross and operating margins to date.
ABIOMED, Inc. Price and Consensus
ABIOMED, Inc. Price and Consensus | ABIOMED, Inc. Quote
STERIS: A Solid Contender
The bulk of STERIS’ revenues are obtained from the healthcare and pharmaceutical industries. Growth in these industries is primarily driven by aging global population, as an increasing number of individuals are entering their prime healthcare consumption years.
Further, these industries are dependent upon advancement in healthcare delivery, acceptance of new technologies, government policies and general economic conditions. With increasing global life expectancy, a larger aging population increases the demand for medical procedures. This, in turn, translates into higher consumption of single use medical devices and surgical kits processed by STERIS.
Considering the consistent success achieved by the company in offering varied medical equipment to its customers, we believe that STERIS holds huge potential to expand its foothold in these industries.
The current macroeconomic environment across the globe has affected STERIS’ financial operations. Governments and insurance companies continue to look for ways to contain the rising cost of healthcare.
This might put pressure on players in the healthcare industry, STERIS being no exception. Increases in prices or lesser availability of raw materials as well as oil and gas might impair STERIS’ procurement of necessary materials for product manufacture.
The company competes for pharmaceutical, research and industrial customers against several players that have robust product portfolios and global reach as well as a number of small companies with limited product offerings and operations in one or a few countries.
STERIS plc Price and Consensus
STERIS plc Price and Consensus | STERIS plc Quote
To Conclude
Our comparative analysis indicates that Abiomed is positioned better than STERIS, considering price performance, earnings growth expectations and sales expectations.
Key Picks
A few other top-ranked players in the broader medical sector are Abaxis, Inc. and Edwards Lifesciences Corp. (EW - Free Report) .
Abaxis, a Zacks Rank #2 stock, has a long-term earnings growth rate of 5.1%.
Edwards Lifesciences has a long-term expected earnings growth rate of 15.1%. The stock has a Zacks Rank of #2.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>