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Why Is Abiomed (ABMD) Up 17.1% Since Last Earnings Report?

Zacks Equity Research

It has been about a month since the last earnings report for Abiomed (ABMD). Shares have added about 17.1% 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 the most recent earnings report in order to get a better handle on the important catalysts.

ABIOMED  Q4 Earnings Beat Estimates, Revenues Miss

ABIOMED, Inc. reported fourth-quarter fiscal 2020 adjusted earnings per share  of $1 which beat the Zacks Consensus Estimate of 96 cents. The figure declined 6.5% year over year.

Adjusted earnings excluded the impact of unrealized loss on investment in Shockwave worth 30 cents.

For fiscal 2020, the company's adjusted earnings came in at $4.44, down 12.9% from the year-ago period. The figure also missed the Zacks Consensus Estimate of $4.70.

The full-year adjusted earnings excluded the impact of unrealized loss on investment in Shockwave worth a penny.

Revenues in Detail

In the fiscal fourth quarter, the company’s revenues came in at $206.7 million, which lagged the Zacks Consensus Estimate of $214.6 million by 2.6%. The metric also fell 0.2% from the prior-year quarter.

For fiscal 2020, total revenues came in at $840.9 million, which also missed the consensus estimate of $846.3 million. However, the figure climbed 9.3% year over year.

Q4 in Detail

U.S. Impella product revenues totaled $164 million, showing a decline of 3% year over year. Per management, U.S. patient usage of the Impella heart pumps fell 5% in the quarter, mainly due to the coronavirus pandemic.

Outside the United States, Impella product revenues totaled $33.4 million, highlighting an increase of 12% year over year. Japan revenues were $8.4 million in the quarter, improving 55% year over year.

Margin Trend

In the quarter under review, gross profit totaled $167.3 million, down 2.9% year over year. Gross margin in the quarter was 80.9% of net revenues, down 222 basis points (bps) year over year.

Operating income totaled $58.1 million, down 11.2% on a year-over-year basis. Operating margin was 28.1%, down 349 bps.

Financial Condition

The company exited fiscal 2020 with $192.3 million of cash and cash equivalents, compared with $121 million of the same at the end of fiscal 2019. The balance sheet was also debt free as of Mar 31, 2020.

Fiscal 2021 Guidance

Due to uncertainty of the extent and duration of the COVID-19 pandemic and the timing of economic recovery, the company will not be issuing full-year revenue or operating margin outlookat this time.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted -77.47% due to these changes.

VGM Scores

Currently, 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

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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