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Are ABMD & DXCM Neck and Neck? Let's Take a Closer Look
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Medical Instrument companies Abiomed, Inc. and DexCom, Inc. (DXCM - Free Report) are two solid contenders in the U.S. MedTech space, which is expected to reach a worth of $409.5 billion by 2023 at a CAGR of 4.5%. Notably, analysts believe that 2019 is likely to prove profitable for U.S. medical device companies, courtesy of the 2.3% Medical Device tax abatement along with focus on Artificial Intelligence and cybersecurity.
Against this backdrop, it is difficult to choose between the above-mentioned companies as they have similar business models. Making things more difficult, the scales apparently look balanced as Abiomed carries a Zacks Rank #2 (Buy), while DexCom sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
However, we make a detailed analysis of the companies’ fundamentals to determine which has a slight edge over the other.
Massachusetts-based Abiomed is engaged in developing, manufacturing and marketing medical products, designed to assist or replace the pumping function of the failing heart. Meanwhile, California-based DexCom is a medical device company focused on the design, development and commercialization of continuous glucose monitoring systems (CGM).
Price Performance
Over the past year, Abiomed’s shares have gained 66.4% compared with DexCom’s 106.7% rally. The Medical Instruments industry has rallied 8.2% in the same time frame. Meanwhile, the S&P 500 index has declined 3.5%.
Which Way Are Estimates Headed?
Earnings
The Zacks Consensus Estimate for Abiomed’s current-quarter earnings per share stands at 93 cents, suggesting an improvement of 32.9% year over year. The same for DexCom is projected at 13 cents, showing year-over-year growth of 30%.
The Zacks Consensus Estimate for Abiomed’s current-quarter revenues is pegged at $194.88 million, suggesting growth of 26.5% from the previous year. The same for DexCom is pegged at $283.08 million, reflecting a rise of 28.1%.
Abiomed currently has a Growth Score of A. This reflects possibilities of outperformance over the long haul. Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 or 2, are better picks than most.
Over the past four years, the company’s revenues have seen a CAGR of 37.2% to $594 million.
Abiomed raised its fiscal 2019 guidance, calling for revenues of $765-$770 million, showing an increase of 29-30% from the previous fiscal.
DexCom also has a Growth Score of A. Over the past four years, the company’s revenues have seen a CAGR of 40.5% to $719 million.
DexCom has also raised the 2018 guidance. The company expects revenues of $975 million against the previous projection of $925 million.
Other Key Picks
Other top-ranked stocks in the broader medical space are Stryker Corporation (SYK - Free Report) and Surmodics, Inc. (SRDX - Free Report) .
Stryker has a long-term expected earnings growth rate of 10% and a Zacks Rank #2.
Surmodics’ long-term earnings growth rate is projected at 10%. The stock carries a Zacks Rank #2.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Are ABMD & DXCM Neck and Neck? Let's Take a Closer Look
Medical Instrument companies Abiomed, Inc. and DexCom, Inc. (DXCM - Free Report) are two solid contenders in the U.S. MedTech space, which is expected to reach a worth of $409.5 billion by 2023 at a CAGR of 4.5%. Notably, analysts believe that 2019 is likely to prove profitable for U.S. medical device companies, courtesy of the 2.3% Medical Device tax abatement along with focus on Artificial Intelligence and cybersecurity.
Against this backdrop, it is difficult to choose between the above-mentioned companies as they have similar business models. Making things more difficult, the scales apparently look balanced as Abiomed carries a Zacks Rank #2 (Buy), while DexCom sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
However, we make a detailed analysis of the companies’ fundamentals to determine which has a slight edge over the other.
Massachusetts-based Abiomed is engaged in developing, manufacturing and marketing medical products, designed to assist or replace the pumping function of the failing heart. Meanwhile, California-based DexCom is a medical device company focused on the design, development and commercialization of continuous glucose monitoring systems (CGM).
Price Performance
Over the past year, Abiomed’s shares have gained 66.4% compared with DexCom’s 106.7% rally. The Medical Instruments industry has rallied 8.2% in the same time frame. Meanwhile, the S&P 500 index has declined 3.5%.
Which Way Are Estimates Headed?
Earnings
The Zacks Consensus Estimate for Abiomed’s current-quarter earnings per share stands at 93 cents, suggesting an improvement of 32.9% year over year. The same for DexCom is projected at 13 cents, showing year-over-year growth of 30%.
ABIOMED, Inc. Price and Consensus
ABIOMED, Inc. Price and Consensus | ABIOMED, Inc. Quote
Sales
The Zacks Consensus Estimate for Abiomed’s current-quarter revenues is pegged at $194.88 million, suggesting growth of 26.5% from the previous year. The same for DexCom is pegged at $283.08 million, reflecting a rise of 28.1%.
DexCom, Inc. Price and Consensus
DexCom, Inc. Price and Consensus | DexCom, Inc. Quote
What’s Favoring the Stocks?
Abiomed currently has a Growth Score of A. This reflects possibilities of outperformance over the long haul. Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 or 2, are better picks than most.
Over the past four years, the company’s revenues have seen a CAGR of 37.2% to $594 million.
Abiomed raised its fiscal 2019 guidance, calling for revenues of $765-$770 million, showing an increase of 29-30% from the previous fiscal.
DexCom also has a Growth Score of A. Over the past four years, the company’s revenues have seen a CAGR of 40.5% to $719 million.
DexCom has also raised the 2018 guidance. The company expects revenues of $975 million against the previous projection of $925 million.
Other Key Picks
Other top-ranked stocks in the broader medical space are Stryker Corporation (SYK - Free Report) and Surmodics, Inc. (SRDX - Free Report) .
Stryker has a long-term expected earnings growth rate of 10% and a Zacks Rank #2.
Surmodics’ long-term earnings growth rate is projected at 10%. The stock carries a Zacks Rank #2.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>