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Why You Should Retain Abiomed (ABMD) Stock in Your Portfolio
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Abiomed, Inc. is gaining traction from its flagship Impella product line and a plethora of regulatory approvals. However, tough competition has been a deterrent for the stock.
The company, with a market capitalization of $14.74 billion, is a leading developer of medical products, designed to assist or replace the pumping function of the failing heart. Its earnings are expected to improve 20.5% over the next five years. Also, this currently Zacks Rank #3 (Hold) company has a trailing four-quarter earnings surprise of 49.6%, on average.
Over the past three months, shares of the company have gained 20.9% compared with the industry’s growth of 7.3%.
Let’s delve deeper into the factors working in favor of the company.
Highly Exclusive Impella Product Line: Impella, Abiomed’s flagship product line, continued to be a growth driver. Iti s the world's smallest heart pump and a support system of percutaneous, catheter-based devices offering hemodynamic support to the heart. In the third-quarter fiscal 2021, Abiomed treated more than 1000 patients with the Impella 5.5. At the end of December 2020 in the United States, the Impella CP was available at 1492 sites. The company placed the Impella 5 in 660 sites and the Impella 5.5 with SmartAssist is currently available at158 sites, up 37 sites from the level in the fiscal second quarter.
The company’s controlled rollout of the Impella 5.5 continues to deliver a robust performance as its U.S. surgical portfolio registered a 48% increase in revenues year over year. The Impella RP is currently available at 569 sites, up 17 sites from the reading in the fiscal second quarter. RP witnessed a solid quarter with revenues rising 21% year over year on patient utilization. In January 2021, management announced that a huge study of 356 patients treated with Impella 5.5 through SmartAssist across 16 U.S. and German centers demonstrated a 79% survival rate at explants.
Positive Tidings on Regulatory Front: Abiomed has been riding on a suite of regulatory approvals of late. In the fiscal third quarter, the company attained a 510(k) clearance for the Impella XR Sheath with the Impella 2.5 heart pump. It treated eight patients with the XR Sheath outside of the United States in the fiscal third quarter and shifted the majority of its focus to the Impella CP for both 510(k) clearance and PMA supplements. In the reported quarter, the Impella ECP (expandable cardiac power) heart pump, a true nine French pump, ideal for a high-risk protected PCI (Percutaneous Coronary Intervention), completed the first stage of its FDA early feasibility study (EFS). In October 2020, the company announced a 510(k) clearance forthe Abiomed’s Breethe OXY-1 System.
Downside
Cutthroat Market Competition: Competition among providers of treatments for heart-related diseases is intense and subject to rapid technological change plus evolving industry requirements and standards. Abiomed’s products compete with a temporary cardiac assist device from Thoratec.The company also faces stiff competition from organizations developing permanent heart assist products like Thoratec, Teleflex, HeartWare, Jarvik Heart and MicroMed Technology.
Which Way Are Estimates Trending?
The Zacks Consensus Estimate for the company’s fiscal 2021 revenues is pegged at $835.4 million, suggesting a 0.7% fall from the year-ago reported number.
For fiscal 2021, the Zacks Consensus Estimate for the company’s earnings is pegged at $4.81, indicatinga 1.5% rise from the year-earlier reported figure.
Align Technology has a projected long-term earnings growth rate of 19.8%.
Hologic has a projected long-term earnings growth rate of 15.4%.
Abbott has an estimated long-term earnings growth rate of 14.6%.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Image: Bigstock
Why You Should Retain Abiomed (ABMD) Stock in Your Portfolio
Abiomed, Inc. is gaining traction from its flagship Impella product line and a plethora of regulatory approvals. However, tough competition has been a deterrent for the stock.
The company, with a market capitalization of $14.74 billion, is a leading developer of medical products, designed to assist or replace the pumping function of the failing heart. Its earnings are expected to improve 20.5% over the next five years. Also, this currently Zacks Rank #3 (Hold) company has a trailing four-quarter earnings surprise of 49.6%, on average.
Over the past three months, shares of the company have gained 20.9% compared with the industry’s growth of 7.3%.
Let’s delve deeper into the factors working in favor of the company.
Highly Exclusive Impella Product Line: Impella, Abiomed’s flagship product line, continued to be a growth driver. Iti s the world's smallest heart pump and a support system of percutaneous, catheter-based devices offering hemodynamic support to the heart. In the third-quarter fiscal 2021, Abiomed treated more than 1000 patients with the Impella 5.5. At the end of December 2020 in the United States, the Impella CP was available at 1492 sites. The company placed the Impella 5 in 660 sites and the Impella 5.5 with SmartAssist is currently available at158 sites, up 37 sites from the level in the fiscal second quarter.
The company’s controlled rollout of the Impella 5.5 continues to deliver a robust performance as its U.S. surgical portfolio registered a 48% increase in revenues year over year. The Impella RP is currently available at 569 sites, up 17 sites from the reading in the fiscal second quarter. RP witnessed a solid quarter with revenues rising 21% year over year on patient utilization. In January 2021, management announced that a huge study of 356 patients treated with Impella 5.5 through SmartAssist across 16 U.S. and German centers demonstrated a 79% survival rate at explants.
Positive Tidings on Regulatory Front: Abiomed has been riding on a suite of regulatory approvals of late. In the fiscal third quarter, the company attained a 510(k) clearance for the Impella XR Sheath with the Impella 2.5 heart pump. It treated eight patients with the XR Sheath outside of the United States in the fiscal third quarter and shifted the majority of its focus to the Impella CP for both 510(k) clearance and PMA supplements. In the reported quarter, the Impella ECP (expandable cardiac power) heart pump, a true nine French pump, ideal for a high-risk protected PCI (Percutaneous Coronary Intervention), completed the first stage of its FDA early feasibility study (EFS). In October 2020, the company announced a 510(k) clearance forthe Abiomed’s Breethe OXY-1 System.
Downside
Cutthroat Market Competition: Competition among providers of treatments for heart-related diseases is intense and subject to rapid technological change plus evolving industry requirements and standards. Abiomed’s products compete with a temporary cardiac assist device from Thoratec.The company also faces stiff competition from organizations developing permanent heart assist products like Thoratec, Teleflex, HeartWare, Jarvik Heart and MicroMed Technology.
Which Way Are Estimates Trending?
The Zacks Consensus Estimate for the company’s fiscal 2021 revenues is pegged at $835.4 million, suggesting a 0.7% fall from the year-ago reported number.
For fiscal 2021, the Zacks Consensus Estimate for the company’s earnings is pegged at $4.81, indicatinga 1.5% rise from the year-earlier reported figure.
Stocks to Consider
Some better-ranked stocks from the broader medical space are Align Technology (ALGN - Free Report) , Hologic (HOLX - Free Report) and Abbott Laboratories (ABT - Free Report) . While Align Technology and Hologic each currently sports a Zacks Rank#1 (Strong Buy), Abbott presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Align Technology has a projected long-term earnings growth rate of 19.8%.
Hologic has a projected long-term earnings growth rate of 15.4%.
Abbott has an estimated long-term earnings growth rate of 14.6%.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Click here to download this report FREE >>