On Dec 9, we maintained our Neutral recommendation on
). We are encouraged about the company's multiple near-term
drivers, including new products and clinical trials. However, we
are disappointed with the company's significant year-over-year
decline in earnings in the fiscal 2014-second quarter.
On Nov 6, ABMD's fiscal 2014 second-quarter earnings per share of
3 cents plunged 76.9% from 13 cents in the year-ago quarter.
However, EPS was in line with the Zacks Consensus Estimate.
Revenues for the quarter grew 19% to $44.3 million, in line with
the Zacks Consensus Estimate. This had marked the 16th straight
quarter of Abiomed's year-over-year revenue growth in double
digits. The improvement was led by record patient utilization of
the Impella device in the quarter.
Following the release of fiscal second quarter results, the Zacks
Consensus Estimate for fiscal 2014 fell 26.7% to 11 cents per
share. The Zacks Consensus Estimate for fiscal 2015 also went
down 6.5% to 43 cents over the same timeframe. Abiomed now has a
Zacks Rank #3 (Hold).
ABMD enjoys strong demand for its Impella products, given its
unique technology and being the world's smallest heart pump. The
company is likely to maintain this growth trend in the future on
the back of favorable demographics and increasing trend of heart
However, Abiomed significantly lowered its operating margin
forecast to the range of nil to 5%, compared with the earlier
guidance of 7%-8% on the back of higher costs related to legal
issues, regulatory submissions and pipeline development, which
are likely to increase SG&A and R&D expenses. These
additional expenses are pressurizing the company's bottom-line
growth, which is a cause of concern.
Other Stocks to Consider
Some better-ranked stocks that are worth a look in the medical
instruments industry include
Natus Medical Inc.
). BABY carries a Zacks Rank #1 (Strong Buy), while both
CRY and ANGO carry a Zacks Rank #2 (Buy).
ABIOMED INC (ABMD): Free Stock Analysis
ANGIODYNAMICS (ANGO): Free Stock Analysis
NATUS MEDICAL (BABY): Free Stock Analysis
CRYOLIFE INC (CRY): Free Stock Analysis
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