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3 Reasons to Hold Abiomed (ABMD) Stock in Your Portfolio
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Abiomed, Inc. is well-poised for growth in the coming quarters, backed by strength in its Impella product line. A robust first-quarter fiscal 2023 performance and a solid global foothold are expected to contribute further. Third-party reimbursement and forex woes persist.
Over the past year, this Zacks Rank #3 (Hold) stock has lost 30.4% compared with 32.7% fall of the industry and the S&P 500’s 13.7% decline.
The renowned global provider of medical products designed to assist or replace the pumping function of the failing heart has a market capitalization of $11.79 billion. The company projects 6.8% growth for fiscal 2023 and expects to maintain its strong performance. It has delivered an earnings surprise of 10.9% for the past four quarters, on average.
Image Source: Zacks Investment Research
Let’s delve deeper.
Strength in Impella: Abiomed’s flagship product line, Impella, has continued to be a growth driver, which raises our optimism. The company is focused on achieving its Abiomed 2.0 goals, which will drive the rollout of its remote interface technology with SmartAssist and Impella Connect. The company continues to invest in its pipeline of advanced technologies, including the XR Sheath, Impella ECP, Impella Connect, Impella BTR and new AI algorithms. Abiomed’s Impella 5.5 with SmartAssist has received FDA pre-market approval based on its safety and efficacy in the therapy of cardiogenic shock.
Solid Global Foothold: We are upbeat about Abiomed’s solid global foothold. In the first quarter of fiscal 2023, U.S. Impella product revenues recorded robust year-over-year growth on the back of a 6% surge in patient utilization. Abiomed’s U.S. surgical products had another strong quarter, driven by continued demand for the Impella 5.5 with SmartAssist. At the end of first-quarter fiscal 2023, Impella CP was in 1,598 sites in the United States. The Impella 5.5 was in 444 sites out of the potential 1,100 hospitals with surgical suites. The Impella RP was in 675 sites.
Outside the United States, Impella product revenues were also solid, with continued strength in Japan and Europe product revenues.
Strong Q1 Results: Abiomed’s solid first-quarter fiscal 2023 results buoy optimism. The company saw year-over-year uptick in the top and bottom lines, and continued strength in its global Impella revenues. The company’s robust geographical performance is also encouraging.
Downsides
Forex Woes: Abiomed’s reported sales and earnings are subject to fluctuations in foreign currency exchange rates because some of its international sales are denominated in local currencies and not in U.S. dollars. The company, at present, does not hedge its exposure to foreign currency fluctuations from international operations. Therefore, revenues and expenses occurring in future that are denominated in foreign currencies may be translated into U.S. dollars at less favorable rates, resulting in reduced revenues and earnings.
Third-Party Reimbursement: Abiomed depends on third-party reimbursement to its customers for market acceptance of its products. Sales of medical devices largely depend on the reimbursement of patients’ medical expenses by government healthcare programs and private health insurers. Without government reimbursement or third-party insurers’ payments for patient care, the market for Abiomed’s products will be limited.
Estimate Trend
Abiomed is witnessing a positive estimate revision trend for fiscal 2023. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 3% north to $4.74.
The Zacks Consensus Estimate for the company’s second-quarter fiscal 2023 revenues is pegged at $273.4 million, suggesting a 10.2% improvement from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , ShockWave Medical, Inc. (SWAV - Free Report) and McKesson Corporation (MCK - Free Report) .
AMN Healthcare, flaunting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 3.2%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 15.7%.
AMN Healthcare has lost 13.6% compared with the industry’s 38.2% fall in the past year.
ShockWave Medical, sporting a Zacks Rank #1 at present, has an estimated growth rate of 33.1% for 2023. SWAV’s earnings surpassed estimates in all the trailing four quarters, the average beat being 180.1%.
ShockWave Medical has gained 30.7% against the industry’s 32.7% fall over the past year.
McKesson, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 9.9%. MCK’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, the average beat being 13%.
McKesson has gained 76.4% against the industry’s 14.6% fall over the past year.
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3 Reasons to Hold Abiomed (ABMD) Stock in Your Portfolio
Abiomed, Inc. is well-poised for growth in the coming quarters, backed by strength in its Impella product line. A robust first-quarter fiscal 2023 performance and a solid global foothold are expected to contribute further. Third-party reimbursement and forex woes persist.
Over the past year, this Zacks Rank #3 (Hold) stock has lost 30.4% compared with 32.7% fall of the industry and the S&P 500’s 13.7% decline.
The renowned global provider of medical products designed to assist or replace the pumping function of the failing heart has a market capitalization of $11.79 billion. The company projects 6.8% growth for fiscal 2023 and expects to maintain its strong performance. It has delivered an earnings surprise of 10.9% for the past four quarters, on average.
Image Source: Zacks Investment Research
Let’s delve deeper.
Strength in Impella: Abiomed’s flagship product line, Impella, has continued to be a growth driver, which raises our optimism. The company is focused on achieving its Abiomed 2.0 goals, which will drive the rollout of its remote interface technology with SmartAssist and Impella Connect. The company continues to invest in its pipeline of advanced technologies, including the XR Sheath, Impella ECP, Impella Connect, Impella BTR and new AI algorithms. Abiomed’s Impella 5.5 with SmartAssist has received FDA pre-market approval based on its safety and efficacy in the therapy of cardiogenic shock.
Solid Global Foothold: We are upbeat about Abiomed’s solid global foothold. In the first quarter of fiscal 2023, U.S. Impella product revenues recorded robust year-over-year growth on the back of a 6% surge in patient utilization. Abiomed’s U.S. surgical products had another strong quarter, driven by continued demand for the Impella 5.5 with SmartAssist. At the end of first-quarter fiscal 2023, Impella CP was in 1,598 sites in the United States. The Impella 5.5 was in 444 sites out of the potential 1,100 hospitals with surgical suites. The Impella RP was in 675 sites.
Outside the United States, Impella product revenues were also solid, with continued strength in Japan and Europe product revenues.
Strong Q1 Results: Abiomed’s solid first-quarter fiscal 2023 results buoy optimism. The company saw year-over-year uptick in the top and bottom lines, and continued strength in its global Impella revenues. The company’s robust geographical performance is also encouraging.
Downsides
Forex Woes: Abiomed’s reported sales and earnings are subject to fluctuations in foreign currency exchange rates because some of its international sales are denominated in local currencies and not in U.S. dollars. The company, at present, does not hedge its exposure to foreign currency fluctuations from international operations. Therefore, revenues and expenses occurring in future that are denominated in foreign currencies may be translated into U.S. dollars at less favorable rates, resulting in reduced revenues and earnings.
Third-Party Reimbursement: Abiomed depends on third-party reimbursement to its customers for market acceptance of its products. Sales of medical devices largely depend on the reimbursement of patients’ medical expenses by government healthcare programs and private health insurers. Without government reimbursement or third-party insurers’ payments for patient care, the market for Abiomed’s products will be limited.
Estimate Trend
Abiomed is witnessing a positive estimate revision trend for fiscal 2023. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 3% north to $4.74.
The Zacks Consensus Estimate for the company’s second-quarter fiscal 2023 revenues is pegged at $273.4 million, suggesting a 10.2% improvement from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , ShockWave Medical, Inc. (SWAV - Free Report) and McKesson Corporation (MCK - Free Report) .
AMN Healthcare, flaunting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 3.2%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 15.7%.
You can see the complete list of today’s Zacks #1 Rank stocks here.
AMN Healthcare has lost 13.6% compared with the industry’s 38.2% fall in the past year.
ShockWave Medical, sporting a Zacks Rank #1 at present, has an estimated growth rate of 33.1% for 2023. SWAV’s earnings surpassed estimates in all the trailing four quarters, the average beat being 180.1%.
ShockWave Medical has gained 30.7% against the industry’s 32.7% fall over the past year.
McKesson, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 9.9%. MCK’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, the average beat being 13%.
McKesson has gained 76.4% against the industry’s 14.6% fall over the past year.