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Why Is ABIOMED (ABMD) Up 13.6% Since Its Last Earnings Report?

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It has been about a month since the last earnings report for ABIOMED, Inc. (ABMD - Free Report) . Shares have added about 13.6% in that time frame.

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

Recent Earnings

Abiomed reported fourth-quarter fiscal 2018 earnings per share of 80 cents, which beat the Zacks Consensus Estimate by 25%. Earnings improved a huge 142.4% from the year-ago quarter.

Revenue Details

Revenues in the reported quarter came in at $174.4 million, beating the Zacks Consensus Estimate by 6.3%. Revenues also increased 40% from the prior-year quarter.

Per management, the upside was driven by U.S. patient utilization growth of35% on a year-over-year basis.

Reorder performance continued to be strong in the quarter. U.S. reorders increased 35% to 140 million from the prior-year quarter, which translated into a reorder rate of approximately 100%. Average combined inventory at the hospitals for the Impella 2.5 and the Impella CP rose slightly to 3.8 units per site versus 3.7 in the prior quarter and 3.4 last year.

Impella heart pump worldwide revenues in the quarter under review totaled $198.3 million, up 42% year over year.

In the United States, Impella raked in $146.2 million, up 35% from the year-ago quarter.

Outside the United States, fourth-quarter revenues generated from Impella heart pumps was $22.1 million, up a whopping 107% year over year. Significant contributions came from Germany of $15 million inrevenues, up 95%.

Margins

In the quarter under review, gross margin was 82.7%, down 190 basis points (bps) year over year.

Operating income in the quarter grossed $47.6 million, up 64.1% on a year-over-year basis. Operating margin was 27.3%,up 400 bps.

Financial Condition

ABIOMED’s balance sheet has been strong at the end of fiscal 2018. The company generated $49.1 million of cash, cash equivalents and marketable securities at the end of the fourth quarter. The company is currently debt-free.

FY19 Outlook

For fiscal 2019, the company expects total revenues in the range of $740-$770 million, reflecting an increase of 25% to 30% over the prior fiscal.

Full-year tax rate is expected between 28% and 30%.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. There have been four revisions higher for the current quarter compared to one lower.

ABIOMED, Inc. Price and Consensus

 

VGM Scores

At this time, ABMD has a nice Growth Score of B, however its Momentum is doing a bit better with an A. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% for this investment strategy.

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

Our style scores indicate that the stock is more suitable for momentum investors than growth investors.

Outlook

Estimates have been broadly trending upward for the stock and the magnitude of these revisions looks promising. It comes with little surprise ABMD has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.




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