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Abiomed (ABMD) Gains As Market Dips: What You Should Know

Zacks Equity Research

Abiomed (ABMD) closed at $339.28 in the latest trading session, marking a +1.81% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.01%. Elsewhere, the Dow lost 0.1%, while the tech-heavy Nasdaq added 0.12%.

Heading into today, shares of the maker of heart devices had lost 7.96% over the past month, lagging the Medical sector's gain of 1.11% and the S&P 500's gain of 2.24% in that time.

Wall Street will be looking for positivity from ABMD as it approaches its next earnings report date. In that report, analysts expect ABMD to post earnings of $1.07 per share. This would mark year-over-year growth of 33.75%. Our most recent consensus estimate is calling for quarterly revenue of $216.43 million, up 24.07% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.05 per share and revenue of $778.28 million. These totals would mark changes of +106.12% and +31.08%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for ABMD. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. ABMD is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, ABMD is currently trading at a Forward P/E ratio of 65.97. This valuation marks a premium compared to its industry's average Forward P/E of 36.3.

It is also worth noting that ABMD currently has a PEG ratio of 2.38. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ABMD's industry had an average PEG ratio of 2.73 as of yesterday's close.

The Medical - Instruments industry is part of the Medical sector. This group has a Zacks Industry Rank of 102, putting it in the top 40% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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