) delivered positive earnings surprises in three of the last four
quarters, and is scheduled to deliver fiscal first quarter results
on August 2. Earnings estimates for this heart care device provider
have been trending higher, which made it a Zacks #1 Rank (Strong
Buy) stock on July 19, 2012.
Turnaround Fourth Quarter
On May 16, 2012, Abiomed reported adjusted earnings per share for
its fiscal fourth quarter of 7 cents, beating the Zacks Consensus
Estimate by 16.7%. This also compared favorably with the year-ago
loss of 4 cents. Net income increased to $2.6 million from a loss
of $1.8 million in the year-ago quarter.
Gross margin improved to 81.8% from 79.5% a year ago. Income from
operations was $2.9 million, up from a loss of $1.4 million.
Revenues soared 31% year over year to $37.3 million (a quarterly
record), beating the Zacks Consensus Estimate by 6.2%. The growth
in the top-line reflects solid sales of Impella heart pumps.
Globally, Impella sales rose 43% year over year to $32.3 million in
the fourth quarter. U.S. Impella sales spiked 44% to $29.9 million.
Abiomed opened 26 new U.S. Impella 2.5 sites to end the quarter
with a total of 631 customer sites.
For fiscal 2013, Abiomed forecasts revenues to grow between 20% and
24% to a range of $152 million to $157 million. Worldwide, Impella
sales are expected to rise roughly 30%.
In March 2012, the company made a number of presentations on the
Impella device at the American College of Cardiology Scientific
Sessions. One of the presentations included the first human use of
the Impella RP heart pump outside the U.S. for treating right-sided
Moreover, Abiomed announced the first successful human use of its
new percutaneous Impella cVAD heart pump outside the U.S. The
device can pump up to 4 liters of blood in one minute. The Impella
cVAD is not commercially available in the U.S. The company expects
to receive 510(k) approval for the product by the second half of
Earnings Estimates on the Rise
The Zacks Consensus Estimate for fiscal 2013 has risen 10% in the
last three months to 22 cents per share. For fiscal 2014, the Zacks
Consensus Estimate moved up 2.4% in the last 30 days to 43 cents,
reflecting an implied growth of 91.1%.
Abiomed trades at a premium to its peers by most metrics, such as
price-to-earnings (P/E) and price-to-sales (P/S). The stock is
currently trading at a forward P/E of 105.9x, a 221.3% premium to
the peer group average of 32.9x. Similarly, on a price-to-sales
basis, the stock is trading at 7.4x, 121.9% higher than its peer
group average of 3.3x.
Chart Shows Strength
Abiomed's price performance has been reasonably strong with the
chart showing an upward trend despite periodic pullbacks. Earnings
estimates have guided the stock to rally higher, something that
aggressive growth investors should find attractive.
On the whole, a series of earnings beats, rising estimates and
upbeat growth prospects make Abiomed worth considering. The
one-year return for the stock is 44.7% compared with 4.6% from the
S&P 500 index.
Based in Danvers, Massachusetts and founded in 1981, Abiomed is
dedicated to creating fresh know-how that aid or replace a
faltering human heart. Its Impella product is the smallest heart
The Impella 5.0 catheter and Impella LD are minute heart pumps with
composite motor for usage primarily in heart surgery. These devices
are intended to aid individuals who need greater circulatory
assistance than that provided by Impella 2.5. The Impella 5.0 and
Impella LD devices were granted 510(k) clearance by the Food and
Drug Administration (FDA) in April 2009, for circulatory assistance
for up to six hours. These devices have also received CE Mark
approval in Europe and are authorized for usage in more than 40
ABIOMED INC (ABMD): Free Stock Analysis Report
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