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Abiomed (ABMD) Up 6% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for Abiomed (ABMD). Shares have added about 6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Abiomed due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Abiomed’s Q1 Earnings and Revenues Beat, Margins Up

Abiomed delivered adjusted earnings per share of $1.10 in the first quarter of fiscal 2022, up 89.7% year over year. The figure surpassed the Zacks Consensus Estimate by 3.8%.

GAAP loss per share for the quarter was 59 cents against the year-earlier earnings per share of 98 cents.

Revenues in Detail

Abiomed registered revenues of $252.6 million in the fiscal first quarter, up 53.2% year over year. The figure surpassed the Zacks Consensus Estimate by 3.6%.

Per management, the top line was driven by record global patient utilization with COVID-19 recovery.

Q1 in Detail

Worldwide Impella heart pump product revenues for the quarter totaled $241.5 million, an increase of 55% from the prior-year quarter.

U.S. Impella product revenues totaled $197.5 million, reflecting a rise of 56% year over year. Per management, U.S. patient usage of the Impella heart pumps rose 43% in the quarter.

Outside the United States, Impella product revenues totaled $44 million, highlighting an increase of 51% year over year. Japan Impella product revenues and service improved 24% year over year to $10.9 million.

Margin Trend

In the quarter under review, Abiomed’s gross profit rose 60.9% to $207.4 million. Gross margin expanded 394 basis points (bps) to 82.1%.

Selling, general & administrative expenses rose 51.2% to $103.5 million. Research and development expenses went up 43.1% year over year to $37.7 million. Adjusted operating expenses of $141.2 million increased 48.9% year over year.

Adjusted operating profit totaled $66.2 million, reflecting a 94.3% surge from the prior-year quarter. Adjusted operating margin in the fiscal first quarter expanded 555 bps to 26.2%.

Financial Position

Abiomed exited the fiscal first quarter of 2022 with cash and cash equivalents of $175.5 million compared with $232.7 million at the end of fiscal 2021.

The balance sheet was debt free as of Jun 30, 2021.

Guidance

Abiomed has raised its previously provided financial outlook for the full fiscal year.

The company now anticipates global revenues in the range of $1,030 million-$1,050 million, representing 22-24% growth from the comparable reported figure of fiscal 2021. This is significantly up from the earlier-provided outlook of $990 million-$1,030 million, representing an uptick of 17-22% from the comparable reported figure of fiscal 2021. The Zacks Consensus Estimate for the same is currently pegged at $1.02 billion.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

VGM Scores

At this time, Abiomed has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Abiomed has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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