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Analyst Blog

On Sep 28, ABIOMED Inc. (ABMD - Analyst Report) , a leading provider of breakthrough heart support technologies was raised to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

The upgrade was primarily driven by positive estimate revisions over the last 30 days. Notably, the Zacks Consensus Estimate has been raised by a penny to $1.15 per share for the current year, with one estimate moving higher over the past one month. However, the estimate mark for full-year 2017 moved up by 2 cents to $1.69 per share over the last three months.

A glimpse at the long-term expected earnings growth rate over the next five years reveals an impressive 26.7% rise, much better than the industry average of 19.7%.

Meanwhile, coming to the current share price trend, ABIOMED rallied almost 44% year to date, way better than the S&P 500’s 6.2% over the same time frame. The company has recorded a streak of positive surprises in the past four quarters, the average being 34.9%

ABIOMED INC Price and Consensus


ABIOMED INC Price and Consensus | ABIOMED INC Quote

Growth Factors

The upgrade was supported by a series of notable developments, which include the recent regulatory approval of Impella 2.5 and Impella 5.0 heart pumps in Japan. Moreover, the company has been foraying ahead with international expansion and plans to open a new office in Tokyo.

In this regard, Impella has been a major growth driver for ABIOMED with a revenue contribution of $97.8 million (up 42% year over year) in the just-reported first quarter of 2017. In fact, Impella revenues grew 41% to $89.6 million in the U.S.

Meanwhile, we note that ABIOMED has registered first-quarter of 2017 revenues of $103.0 million (up 40% year over year) and adjusted earnings of 29 cents per share (up 45%), beating the Zacks Consensus Estimate on both the counts. Additionally, the company gained prominence in the last reported quarter with four FDA approvals, $223 million in cash and 365 clinical publications.

Of the other notable developments, the company’s vital study STITCHES got published in the New England Journal of Medicine. The study focuses on factors like lower mortality and improved outcomes associated with revascularization. The company also intends to expand its standard of care in Europe, with Germany being the primary focus.

Key Picks

Other favorably ranked stocks in the broader medical sector include CryoLife Inc. (CRY - Snapshot Report) , IDEXX Laboratories Inc. (IDXX - Analyst Report) and Masimo Corporation (MASI - Analyst Report) . All the companies sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

CryoLife recorded an impressive year-to-date return of 65.4%, better than the S&P 500’s 6.2% over the same time frame. In fact, the company posted positive earnings surprises in the last four quarters, the average being 502.50%.

IDEXX represents a strong year-to-date return of 55.5%. The company also recorded a streak of positive earnings surprises over the last four quarters, the average being 12.7%.

Masimo has an impressive long-term expected earnings growth rate of 15% and a solid year-to-date return of 44.1%.

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