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Abiomed (ABMD) Down 8.6% Since Last Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for Abiomed (ABMD - Free Report) . Shares have lost about 8.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Abiomed due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Abiomed Earnings and Revenues Beat Estimates in Q3

Abiomed, Inc reported third-quarter fiscal 2021 earnings per share of $1.17, which beat the Zacks Consensus Estimate by 1.7%. Also, the figure improved 5.4% year over year.

Revenues in Detail

Revenues of $231.7 million beat the Zacks Consensus Estimate by 2.9%. The metric also rose 4.6% from the prior-year quarter.

Q3 in Detail

U.S. Impella product revenues totaled $179.6 million, reflecting a rise of 1% year over year. However, per management, U.S. patient usage of the Impella heart pumps fell 2% in the quarter, mainly due to the coronavirus pandemic.

Outside the United States, Impella product revenues totaled $41.2 million, highlighting an increase of 17% year over year. Japan Impella product revenues and service improved 38% while European Impella product revenues grew 11% year over year.

Margin Trend

In the quarter under review, gross profit totaled $190.6 million, up 4.9% year over year. Gross margin in the quarter was 82.3% of net revenues, highlighting an expansion of 31 basis points (bps) year over year.

Total operating costs came in at $119.2 million, up 7.1% from the prior-year quarter.

Operating profit totaled $71.4 million, up 1.6% on a year-over-year basis. Operating margin was 30.8%, down 91 bps.

Financial Condition

The company exited the third quarter of fiscal 2021 with $181 million of cash and cash equivalents compared with $202.2 million at the end of the fiscal second quarter.

Cash flow from operating activities came in at $79.1 million in the fiscal third quarter.

The balance sheet was also debt free as of Dec 31, 2020.

Guidance

For the fiscal fourth quarter, global revenues are projected in the range of $225-$235 million, indicating 9-14% growth from the figure reported in fourth-quarter fiscal 2020.The Zacks Consensus Estimate for the same is pegged at $229.6 million.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.

VGM Scores

Currently, Abiomed has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Abiomed has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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