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Why Is Abiomed (ABMD) Down 12.4% Since Last Earnings Report?

Zacks Equity Research
·3-min read

It has been about a month since the last earnings report for Abiomed (ABMD). Shares have lost about 12.4% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Abiomed due for a breakout? 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 Q1 Earnings and Revenues Beat Estimates

ABIOMED, Inc reported first-quarter fiscal 2021adjusted earnings per share  of 58 cents, which beat the Zacks Consensus Estimate of 21 cents  The figure declined 42% year over year.

Revenues in Detail

In the fiscal first quarter, revenues came in at $164.9 million, which beat the Zacks Consensus Estimate of $138.2 million by 19.3%. The metric however fell 20.6% from the prior-year quarter.

Q1 in Detail

U.S. Impella product revenues totaled $126.2 million, showing a decline of 25% year over year. Per management, U.S. patient usage of the Impella heart pumps fell 22% in the quarter, mainly due to the coronavirus pandemic.

Outside the United States, Impella product revenues totaled $29.2 million, highlighting a decrease of 7% year over year. Japan Impella productrevenues improved 4%, while European Impella product revenues fell 13% year over year.

Margin Trend

In the quarter under review, gross profit totaled $128.9 million, down 24.5% year over year. Gross margin in the quarter was 78.2% of net revenues, down 398 basis points (bps) year over year.

Operating profit totaled $34.1 million, down 43.9% on a year-over-year basis. Operating margin was 20.7%, down 858 bps.

Financial Condition

The company exited the first quarter of fiscal 2021 with $ 214.8 million of cash and cash equivalents compared with $192.3 million at the end of the previous quarter. The balance sheet was also debt free as of Jun 30, 2020.

Fiscal 2021 Guidance

Due to uncertainty regarding the extent and duration of the COVID-19 pandemic and the timing of global economic recovery, the company has not issued full-year revenue or operating margin outlook at this time.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 33.08% due to these changes.

VGM Scores

Currently, Abiomed has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, 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 trending upward for the stock, and the magnitude of these revisions looks promising. 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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