On Sep 11, we retained
) at Neutral, following its not-so-impressive first-quarter
fiscal 2014 results. Although the company is making significant
progress with its flagship Impella products, higher operating as
well as legal expenses is pressurizing ABMD's bottom line.
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Why the Retention?
On Aug 1, the leading cardiac assist devices maker's
first-quarter fiscal 2014 adjusted earnings dropped 37.5% to 5
cents per share. It also missed the Zacks Consensus Estimate of 6
cents by 16.7%. However, revenues climbed 10% in the quarter to
$42.7 million, which was roughly in line with the Zacks Consensus
Following the release of fiscal first quarter results, the Zacks
Consensus Estimate for fiscal 2014 plunged 45.5% to 12 cents.
However, the same for fiscal 2015 marginally declined by 3.7% to
The company's engagement in a number of legal issues and various
regulatory submissions are increasing expenses, which, in turn,
resulted in net loss in the fiscal first quarter. This has also
driven management to lower its operating margin guidance for
fiscal 2014. However, they are confident that bottom line will
stabilize in 2015 on the back of cost saving measures and
controlled SG&A and R&D spending.
ABMD is a medical device company with a blue streak growth path.
The company enjoys a strong demand for its Impella products.
Multiple near-term drivers, including new products and clinical
trials, should further boost the use of Impella. The company also
has a solid cash position.
Other Stocks to Consider
Currently, ABMD has a Zacks Rank #3 (Hold). However, other
medical instrument companies such as
) are worth considering. All these stocks carry a Zacks Rank #2