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Biotech / Medical : ABMD - Replacement Heart System
ABMD 266.02+0.8%3:59 PM EDT

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From: Lynn7/11/2018 2:15:40 PM
   of 147
Will Flagship Impella Drive Abiomed's (ABMD) Q1 Earnings?

Zacks Equity Research
July 10, 2018

Abiomed’s ABMD first-quarter fiscal 2019 earnings are scheduled to release on Jul 26, before the market opens.

We believe that the company is set to gain from its flagship Impella product line. An impressive guidance for fiscal 2019 and a recent upgrade to the coveted S&P 500 benchmark are other tailwinds.

In the last reported quarter, Abiomed posted adjusted earnings per share of 80 cents, which beat the Zacks Consensus Estimate by 25%. Earnings also skyrocketed 142.4% from the year-ago quarter’s figure.

For the quarter to be reported, the Zacks Consensus Estimate for revenues is pegged at $171.9 million, reflecting year-over-year rise of 29.8%. The Zacks Consensus Estimate for adjusted earnings per share is pegged at 80 cents, indicating a significant climb of 77.8%.

ABIOMED, Inc. Price and EPS Surprise

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ABIOMED, Inc. Price and EPS Surprise | ABIOMED, Inc. Quote

Solid Impella Product Line Likely to Drive Q1

Impella, which is the world's smallest heart pump and Abiomed’s flagship product line, has continued to be a growth driver for the company.

Recently, the Impella 5.5 heart pump received CE marking approval in Europe. Notably, the first patient was successfully treated at the University Heart Center in Hamburg, Germany. This latest acceptance further enhances Abiomed’s product portfolio. (Read more: Abiomed’s Impella 5.5 Receives CE Mark in Europe)

Management awaits an approval for Impella 5.5 in the United States, which is expected to help Abiomed to significantly advance in the field of heart recovery.

Moreover, the company’s Impella CP heart pump with SmartAssist also received the U.S. FDA Pre-Market Approval (PMA). Additionally, Abiomed has already received CE marking approval from the European Union to market Impella CP with SmartAssist.

In the last reported quarter, the company witnessed the strong adoption of the Impella product line in the United States, Germany and Japan. Management anticipates 25,000 and 50,000 patients to adopt the product line in Germany and Japan, respectively.

Other Factors at Play

View Impressive

For fiscal 2019, the company expects total revenues of $740-$770 million, reflecting an increase of 25-30% over the prior fiscal. Notably, the Zacks Consensus Estimate for revenues is pegged at $765.8 million, which lies within the projected range.

S&P 500 Benchmark

Recently, this Massachusetts-based developer of medical products replaced Wyndham Worldwide Corp. to join the distinguished S&P 500 index. With a portfolio of 500 leading companies that have approximately 80% coverage of the available market capitalization, the S&P 500 index is an important metric for the U.S. equities. Hence, Abiomed’s recent development is a proof of the company’s solid prospects. (Read More: Abiomed to Replace Wyndham in the S&P 500 Benchmark)

Cutthroat Competition

Competition among the treatment providers for heart-related diseases is intense. Abiomed’s products compete with a temporary cardiac assist device by Throated. The company also faces stiff competition from organizations, developing permanent heart assist products like Thoratec, Teleflex, HeartWare, Jarvik Heart and MicroMed Technology.

What Our Model Predicts

Our quantitative model does not predict an earnings beat for Abiomed this quarter.

This is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates. This has been illustrated below:

Earnings ESP: Abiomed has an Earnings ESP of -3.92%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Abiomed currently carries a Zacks Rank #2.
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