Major Factors That Has Driven The ABMD To Hit New 52-Week High


Abiomed (NASDAQ: ABMD), a leading provider of breakthrough heart support and recovery technologies, has reached $268.72, a 52-week high on February 16 and closed at $267.74. The ABMD’s shares have managed to gain 74.6% during the previous two quarters in comparison to a broader industry’s gain of 14.6%. The 52-week high achievement is a significant milestone for each and every stock, as it indicates very positive momentum and is the time when investors are attracted towards the company.

Stocks of the ABMD are towering high and are trading as one of the top-performing in the MedTech space and are indicated to maintain the bullish trend in the weeks to come. It’s the perfect time to take advantage of the price appreciation and put some of your eggs in this basket.

Strong Fundamentals

Abiomed, founded in 1981 and headquartered in Danvers, MA, is well known for manufacturing medical implant devices, including the very famous AbioCor artificial heart and Impella.

Market cap of the ABMD’s stock stands at $11.86 billion and the company also has a highly encouraging five-year historical growth rate of 83.4%, compared with 9.9% historical growth rate of the broader industry and 2.8% of the S&P 500. It is an indication of healthy fundamentals and expectations of in-line performance in the short term.

What Are The Major Factors That Are Driving Stocks of the ABMD?

The four major driving factors of the ABMD’s stock are highlighted below.

Solid Earnings Report for the Third Quarter Of Fiscal 2018

Aboimed on February 01, 2018 reported a revenue of $154 million for the third quarter of the current fiscal year. The report indicates a strong increase of 34% compared to the revenue of the same quarter of the previous year, which is better-than-expected revenues and margins.

Strong Outlook For the Fourth Quarter Of Fiscal Year 2018

A strong third fiscal quarter performance has enabled the company to increase their fiscal year 2018 revenue guidance to nearly $583 million, witnessing an increase of 31% from the previous fiscal year. Based on this guidance, revenues of the company are projected to be approximately $164 for the last quarter of the current fiscal year.

The fiscal year guidance for GAAP operating margin is also increased by the company to 26% which is better than the earlier guidance of 23% to 25%.

Expanded U.S. Food and Drug Administration (FDA) Pre-Market Approval (PMA) for Impella Product Line

On February 14, 2018, ABMD, through a press release announced receiving of an expanded U.S. Food and Drug Administration (FDA) Pre-Market Approval (PMA) for its flagship Impella product line, the Impella 2.5 and Impella CP, Impella 5.0 and Impella LD heart pumps. This expended PMA has enabled the company to use these heart pumps for the treatment of patients with severe coronary artery disease and to treat heart failure associated with cardiomyopathy leading to cardiogenic shock, including peripartum and postpartum cardiomyopathy.

With this expended PMA, Impella 2.5 and Impella CP heart pumps can now be used during elective and urgent high risk percutaneous coronary intervention (PCI) procedures.

According to bcc Research, the cardiac medical devices will capture $67.5 billion in the global market by 2019, at a CAGR of 5.3% during 2014-2019. Keeping in view the prospects in the niche, ABMD has a potential to capture a strong market share in the coming years.

Announcement of Peripartum and Postpartum Cardiomyopathy Approval and Women’s Initiative for Heart Recovery

The announcement of a new indication and Women’s Initiative focused on heart recovery education and awareness has helped driving stocks of the ABMD. This initiative is in combination with the Company’s expanded FDA approval for cardiogenic shock related to Peripartum and Postpartum Cardiomyopathy.

All these factors will help stocks of the ABMD to maintain a bullish trend in the coming days.

— The Option Specialist

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About the Author: The Option Specialist