On Mar 21, we retained
) at Neutral following its impressive third-quarter fiscal 2013
results. Although its earnings managed to beat estimates, we
remain on the sidelines on the back of its rising expenses and
risks associated with current regulatory needs.
Why the Retention?
On Feb 6, the leading cardiac assist devices maker reported
third-quarter fiscal 2013 adjusted earnings per share of 7 cents,
which went up 16.7% from the prior year and beat the Zacks
Consensus Estimate of 6 cents. Revenues climbed 19% year over
year to $38.3 million, which was roughly in line with the Zacks
Consensus Estimate of $38.0 million.
This marked the 13th straight quarter, in which Abiomed recorded
a double-digit gain in earnings. The increase was led by solid
sales of the Impella heart pumps. Additionally, the company
posted record patient utilization of the Impella device in the
quarter. However, gross margin contracted in the quarter due to
rising manufacturing costs.
The company's earnings have also managed to beat the Zacks
Consensus Estimates in the last four quarters with a solid
average surprise of 90.0%. Following the release of third quarter
results, the Zacks Consensus Estimate for 2013 remained unchanged
at 34 cents per share, while that for 2014 moved up by 9.8% to 45
cents per share.
Abiomed is a medical device company with a blue streak growth
path. Multiple near-term drivers, including new products and
clinical trials, should further boost the use of Impella. The
company has a solid cash position. However, regulatory and
reimbursement risks are major headwinds for the company.
Other Stocks to Consider
Medical instrument companies such as
Mindray Medical International
) are worth considering. While Cyberonics and Given Imaging carry
a Zacks Rank #1 (Strong Buy), Mindray retains a Zacks Rank #2
ABIOMED INC (ABMD): Free Stock Analysis
CYBERONICS INC (CYBX): Free Stock Analysis
GIVEN IMAGING (GIVN): Free Stock Analysis
MINDRAY MEDICAL (MR): Free Stock Analysis
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