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Are ABMD & DXCM Neck and Neck? Let's Take a Closer Look

Various market performance charts

Medical Instrument companies Abiomed, Inc.ABMD and DexCom, Inc.DXCM are two solid contenders in the U.S. MedTech space, which is expected to reach a worth of $409.5 billion by 2023 at a CAGR of 4.5%. Notably, analysts believe that 2019 is likely to prove profitable for U.S. medical device companies, courtesy of the 2.3% Medical Device tax abatement along with focus on Artificial Intelligence and cybersecurity.

Against this backdrop, it is difficult to choose between the above-mentioned companies as they have similar business models. Making things more difficult, the scales apparently look balanced as Abiomed carries a Zacks Rank #2 (Buy), while DexCom sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

However, we make a detailed analysis of the companies' fundamentals to determine which has a slight edge over the other.

Massachusetts-based Abiomed is engaged in developing, manufacturing and marketing medical products, designed to assist or replace the pumping function of the failing heart. Meanwhile, California-based DexCom is a medical device company focused on the design, development and commercialization of continuous glucose monitoring systems (CGM).

Price Performance

Over the past year, Abiomed's shares have gained 66.4% compared with DexCom's 106.7% rally. The Medical Instruments industry has rallied 8.2% in the same time frame. Meanwhile, the S&P 500 index has declined 3.5%.

Which Way Are Estimates Headed?

Earnings

The Zacks Consensus Estimate for Abiomed's current-quarter earnings per share stands at 93 cents, suggesting an improvement of 32.9% year over year. The same for DexCom is projected at 13 cents, showing year-over-year growth of 30%.

ABIOMED, Inc. Price and Consensus

ABIOMED, Inc. Price and Consensus | ABIOMED, Inc. Quote

Sales

The Zacks Consensus Estimate for Abiomed's current-quarter revenues is pegged at $194.88 million, suggesting growth of 26.5% from the previous year. The same for DexCom is pegged at $283.08 million, reflecting a rise of 28.1%.

DexCom, Inc. Price and Consensus

DexCom, Inc. Price and Consensus | DexCom, Inc. Quote

What's Favoring the Stocks?

Abiomed currently has a Growth Score of A. This reflects possibilities of outperformance over the long haul. Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 or 2, are better picks than most.

Over the past four years, the company's revenues have seen a CAGR of 37.2% to $594 million.

Abiomed raised its fiscal 2019 guidance, calling for revenues of $765-$770 million, showing an increase of 29-30% from the previous fiscal.

DexCom also has a Growth Score of A. Over the past four years, the company's revenues have seen a CAGR of 40.5% to $719 million.

DexCom has also raised the 2018 guidance. The company expects revenues of $975 million against the previous projection of $925 million.

Other Key Picks

Other top-ranked stocks in the broader medical space are Stryker Corporation SYK and Surmodics, Inc. SRDX .

Stryker has a long-term expected earnings growth rate of 10% and a Zacks Rank #2.

Surmodics' long-term earnings growth rate is projected at 10%. The stock carries a Zacks Rank #2.

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ABIOMED, Inc. (ABMD): Free Stock Analysis Report

Stryker Corporation (SYK): Free Stock Analysis Report

Surmodics, Inc. (SRDX): Free Stock Analysis Report

DexCom, Inc. (DXCM): 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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