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Will Flagship Impella Drive ABIOMED's (ABMD) Q1 Earnings?

Zacks Equity Research

ABIOMED, Inc. ABMD is scheduled to release first-quarter fiscal 2020 results on Aug 1, before market opens. We believe that despite persistent foreign currency woes, solid prospects of the flagship Impella product line will reflect on the results.

ABIOMED’s last-quarter earnings were in line with estimates, with the average earnings surprise being a positive 2.9% for the trailing four quarters.

Which Way Are Estimates Treading?

The Zacks Consensus Estimate for ABIOMED’s fiscal first-quarter earnings is pegged at 99 cents, indicating year-over-year improvement of 26.9%. The same for revenues stands at $210.6 million, suggesting an increase of 17% year over year.

ABIOMED, Inc. Price and EPS Surprise


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

ABIOMED, Inc. price-eps-surprise | ABIOMED, Inc. Quote

Let’s see how things are shaping up prior to the earnings release.

Impella Likely to Drive Q1 Results

ABIOMED’s flagship product line, Impella, has consistently provided a boost to the top line. Impella, a support system of percutaneous, catheter-based devices offering hemodynamic support to the heart, is expected to have driven first-quarter results.

ABIOMED’s progress with respect to SmartAssist, Impella Connect, IQ Impella Quality Assurance Database, Impella RP and Impella 5.0 are expected to show on first-quarter results. The flagship platform also received a series of regulatory approvals recently.

It is encouraging to note that, in May, the company’s Impella 5.0 and Impella LD received FDA approval for treating cardiogenic shock. Other versions like Impella 2.5 and Impella CP have also been approved by the FDA to treat certain advanced heart failure patients undergoing elective and urgent percutaneous coronary interventions.

Also, at the 2019 Society for Cardiovascular Angiography & Interventions Scientific Sessions, ABIOMED announced the commercial availability of Impella CP with SmartAssist. (Read More: ABIOMED to Launch Impella CP With SmartAssist at SCAI)

Moreover, FDA recently validated the company’s Impella RP heart pump to be safe and effective for treatment of right heart failure.
Hence, Impella now ensures higher survival and native heart recovery. Such positive trends are expected to have significantly boosted the results for the quarter-to-be-reported.

Other Factors at Play

ABIOMED issued an impressive view for fiscal 2020.

Notably, the company expects total revenues within $900 million to $945 million, suggesting an increase of 17-23% from fiscal 2019.

This is also indicative of strong top-line performance for the quarter to be reported.

However, headwinds like fluctuation in currency exchange rates might are likely to have affected international sales. ABIOMED has businesses across Europe and earns primarily in Euro and British pound. Due to a sluggish European economy, international revenues are likely to have been affected in the to-be-reported quarter.

Also, ABIOMED faces tough competition in the cardiac devices space, which might weigh on margins.

What Does Our Model Say?

Our proven model says that a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to deliver a positive earnings surprise. However, that is not the case here.

Earnings ESP: ABIOMED has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: ABIOMED carries a Zacks Rank #4 (Sell). Please note that we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revision.

Stocks Worth a Look

Here are a few medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.

Adamis Pharmaceuticals Corporation ADMP has an Earnings ESP of +11.76% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

DENTSPLY SIRONA XRAY has an Earnings ESP of +6.95% and a Zacks Rank #1.

Allena Pharmaceuticals, Inc. ALNA has an Earnings ESP of +7.55% and a Zacks Rank #1.

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