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Abaxis (ABAX): Solid Veterinary Show Despite Global Hiccups

On Jun 3, 2016, we issued an updated research report on Abaxis, Inc.ABAX . The stock currently carries a Zacks Rank #4 (Sell).

Abaxis delivered a strong financial performance in the fourth quarter of fiscal 2016, wherein its bottom line exceeded the Zacks Consensus Estimate while the top line met the mark. We are encouraged by the company's stupendous performance with regard to its VetScan Rapid Tests (81% increase in its annual revenue), a relatively new business that complements its VetScan reagent discs.

Abaxis remains a strong player in the veterinary market, with solid sales from its veterinary business accounting for 81.5% of total revenue in the fourth quarter. This business witnessed a 9% year-over-year improvement on account of robust growth in veterinary consumables despite soft instrument sales.

Evidently, global sales of veterinary rotor units rose 6%, driven by high-single-digit growth in the markets of North America. In terms of top line, global veterinary rotor revenues also increased 6% during the quarter.

Moreover, the strong portfolio of consumable products looks promising and is expected to generate significant cash flow down the line.

On the flip side, we note that late in the fourth quarter, Abaxis annualized its Abaxis Veterinary Reference Laboratories (AVRL) business divestment. We still believe that this has weakened the company's foothold in the growing reference laboratory market. Also, Abaxis faces tough currency headwinds in the international market, similar to several other U.S.-based companies with operations abroad.

Stocks to Consider

Investors interested in the broader medical sector can consider stocks like ICU Medical, Inc. ICUI , LeMaitre Vascular, Inc. LMAT and NuVasive, Inc. NUVA . All the three stocks carry a Zacks Rank #2 (Buy).

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ABAXIS INC (ABAX): Free Stock Analysis Report

LEMAITRE VASCLR (LMAT): Free Stock Analysis Report

NUVASIVE INC (NUVA): Free Stock Analysis Report

ICU MEDICAL INC (ICUI): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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