Shares of Danvers, MA-based Abiomed Inc ABMD scaled a new 52-week high of $74.70 in mid-day trading on Mar 24, after the company announced late Monday that the FDA had approved its Impella 2.5 heart pump.
The company’s shares pulled back to close the day at $72.48, translating into a striking one-year return of nearly 167%. Its year-to-date return is an impressive 90.4%, which is significantly higher than the S&P 500 return of 1.58%.
This Zacks Rank #1 (Strong Buy) stock has a market cap of around $2.96 billion while average volume of shares traded over the last three months stands at roughly 0.5 million.
Growth Catalysts
The FDA Pre-Market Approval (PMA) for Abiomed’s Impella 2.5 heart pump is a noteworthy event for the company. Impella 2.5, the world's smallest heart pump, is the first hemodynamic support device to receive an indication for use in high risk percutaneous coronary intervention (PCI) procedures.
We believe that this approval expands the company’s addressable market and bodes well for the Impella line as a whole. Moreover, the Impella RP, which received Humanitarian Device Exemption (HDE) approval in January this year, also reflects continued progress of Abiomed’s regulatory processes.
Adding further impetus to the stock are Abiomed’s impressive third-quarter results wherein both earnings and revenues crushed their respective Zacks Consensus Estimate and also showed remarkable year-over-year growth. Abiomed’s third-quarter results were primarily driven by robust performance by its flagship Impella product line.
Impella revenues grew almost 37% year over year on a global basis, while an additional 21 hospitals purchased Impella heart pumps during the quarter, reaching the installed customer base to 931 sites at the end of the quarter. We believe that robust demand for Impella products will continue to drive the company’s top line.
Abiomed also raised its fiscal 2015 revenue guidance which is another positive in our view. The company now expects revenues in the range of $223–$226 million (up from the earlier guidance of $209–$212 million). The upgraded guidance reflects year-over-year revenue growth of 21% to 23%.
Furthermore, Abiomed’s long-term expected earnings growth rate stands higher at 19.5% compared with industry growth of 18.2%.
Other Stocks to Consider
Other well-performing stocks in the medical instruments industry include Inogen INGN, Edwards Lifesciences Corp EW and Fluidigm Corp FLDM. While Inogen sports the same Zacks Rank as Abiomed, both Edwards Lifesciences and Fluidigm carry a Zacks Rank #2 (Buy).
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