On Jun 17, we downgraded cardiac assist devices maker,
), to Neutral, as we believe that the positives from its last
earnings have already been factored into the current stock price.
Why the Downgrade?
Estimates for Abiomed have been declining since it reported
fourth quarter fiscal 2013 results on May 2. Following the
results, the Zacks Consensus Estimate for fiscal 2014 slipped 25%
to 33 cents per share. The Zacks Consensus Estimate for fiscal
2015 has also declined significantly (down 27% to 54 cents per
share). With the Zacks Consensus Estimate for both fiscal 2014
and 2015 going down, the company now has a Zacks Rank #3 (Hold).
The global healthcare environment is still challenging. Thus,
Abiomed's significant exposure in Europe remains a cause of
concern. Moreover, the company is facing regulatory issues in the
U.S. regarding its Impella products. Research and development
initiatives to meet regulatory requirements might add pressure on
the company's margins. Competition from other industry leaders
) and fluctuating foreign currency remain additional headwinds.
On the positive side, Abiomed 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. However, the company's sole dependence on a single
product line is risky, as any kind of disruption or delay in
Impella sales will adversely affect the business
Abiomed's fourth-quarter fiscal 2013 revenues of $43.7 million as
well as EPS of 9 cents beat the Zacks Consensus Estimate of $42
million and 7 cents, respectively. The company posted record
revenues and patient support in fiscal 2013. However, we do not
see any near-term catalysts that could boost the share price
Other Med-Tech Stocks to Consider
While we remain on the sidelines regarding Abiomed, other stocks
) warrant a look. These stocks carry a Zacks Rank #1 (Strong
ABIOMED INC (ABMD): Free Stock Analysis
NATUS MEDICAL (BABY): Free Stock Analysis
MYRIAD GENETICS (MYGN): Free Stock Analysis
THORATEC CORP (THOR): Free Stock Analysis
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