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Abaxis: Growth on Test Menu Expansion; Competition Rife

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On Jul 4, 2016, we issued an updated research report on Abaxis, Inc. , which develops, manufactures, markets, and sells portable blood analysis systems. The stock currently carries a Zacks Rank #3 (Hold).

Abaxis has been working on expanding its portfolio of rapid test menu in the recent past. The company also plans to expand its geographical foothold. Recently the company signed an exclusive point-of-care instrument contract with another new national buying group of 870 plus members.

Abaxis continues to be a strong player in the veterinary market, backed by solid sales from its veterinary business. This business particularly witnessed improvement on account of robust growth in veterinary consumables despite soft instrument sales.

Till date, Abaxis’ Piccolo remains the only point-of-care technology that can deliver comprehensive diagnostic grade chemistry results within the 15-minute visit window that retailers target. So far, on a year-to-date basis, Abaxis placed over 320 Piccolos in hospital systems in the U.S.

On the flip side, Abaxis’ heavy reliance on distributors to sell its products in a number of countries has led the company to lose control over the marketing and sale of some of its prominent products in some cases. Moreover, the company’s decision to divest its profitable AVRL business has been impacting growth at the reference laboratory space.

Also, Abaxis faces currency headwinds in the international market, like several other U.S.-based companies with operations abroad.

Stocks to Consider

Some better-ranked medical stocks include NuVasive, Inc. , Boston Scientific Corporation (BSX - Free Report) and ICU Medical, Inc. (ICUI - Free Report) . While NuVasive sports a Zacks Rank #1 (Strong Buy), Boston Scientific and ICU Medical carry a Zacks Rank #2 (Buy).

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