U.S. markets open in 8 hours 36 minutes
  • S&P Futures

    3,762.25
    -3.25 (-0.09%)
     
  • Dow Futures

    30,853.00
    -25.00 (-0.08%)
     
  • Nasdaq Futures

    12,436.25
    -18.75 (-0.15%)
     
  • Russell 2000 Futures

    2,141.00
    -3.50 (-0.16%)
     
  • Crude Oil

    64.43
    +0.60 (+0.94%)
     
  • Gold

    1,692.00
    -8.70 (-0.51%)
     
  • Silver

    25.26
    -0.20 (-0.79%)
     
  • EUR/USD

    1.1963
    -0.0016 (-0.13%)
     
  • 10-Yr Bond

    1.5500
    -1.5500 (-100.00%)
     
  • Vix

    28.57
    -26.67 (-100.00%)
     
  • GBP/USD

    1.3887
    -0.0007 (-0.05%)
     
  • USD/JPY

    108.0730
    +0.0970 (+0.09%)
     
  • BTC-USD

    47,208.04
    -2,125.70 (-4.31%)
     
  • CMC Crypto 200

    942.35
    -44.86 (-4.54%)
     
  • FTSE 100

    6,650.88
    -24.59 (-0.37%)
     
  • Nikkei 225

    28,710.69
    -219.42 (-0.76%)
     

Shareholders Are Thrilled That The Abiomed (NASDAQ:ABMD) Share Price Increased 229%

  • Oops!
    Something went wrong.
    Please try again later.
Simply Wall St
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.

The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But on the bright side, if you buy shares in a high quality company at the right price, you can gain well over 100%. For example, the Abiomed, Inc. (NASDAQ:ABMD) share price has soared 229% in the last half decade. Most would be very happy with that.

See our latest analysis for Abiomed

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During five years of share price growth, Abiomed achieved compound earnings per share (EPS) growth of 8.3% per year. This EPS growth is lower than the 27% average annual increase in the share price. So it's fair to assume the market has a higher opinion of the business than it did five years ago. That's not necessarily surprising considering the five-year track record of earnings growth. This favorable sentiment is reflected in its (fairly optimistic) P/E ratio of 59.13.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

earnings-per-share-growth
earnings-per-share-growth

This free interactive report on Abiomed's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's nice to see that Abiomed shareholders have received a total shareholder return of 44% over the last year. That gain is better than the annual TSR over five years, which is 27%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. Before deciding if you like the current share price, check how Abiomed scores on these 3 valuation metrics.

Of course Abiomed may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.