Abiomed Inc. Stock Upgraded (ABMD)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model

NEW YORK ( TheStreet) -- Abiomed (Nasdaq: ABMD) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

  • ACTIVE STOCK TRADERS: Get full access to Jim Cramer's thoughts for less than $3/week - sometimes before he says them on TV! Start with a 14-Day Free Trial.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 6.0%. Since the same quarter one year prior, revenues rose by 41.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • ABMD has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 5.21, which clearly demonstrates the ability to cover short-term cash needs.
  • ABIOMED INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ABIOMED INC turned its bottom line around by earning $0.03 versus -$0.32 in the prior year. This year, the market expects an improvement in earnings ($0.30 versus $0.03).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income increased by 167.9% when compared to the same quarter one year prior, rising from -$4.59 million to $3.12 million.
  • Net operating cash flow has significantly increased by 150.46% to $4.32 million when compared to the same quarter last year. In addition, ABIOMED INC has also vastly surpassed the industry average cash flow growth rate of 13.43%.

ABIOMED, Inc. provides medical devices in circulatory support and continuum of care in heart recovery to acute heart failure patients. The company's products are designed to enable the heart to rest, heal, and recover by enhancing blood flow and/or performing the pumping function of the heart. The company has a P/E ratio of 89.8, equal to the average health services industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Abiomed has a market cap of $851.8 million and is part of the health care sector and health services industry. Shares are up 16.7% year to date as of the close of trading on Wednesday.

You can view the full Abiomed Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model

FREE from Real Money's Jim Cramer: Winners and Losers Election 2012 - Steps to take NOW so you can profit no matter who is in charge! Free download now.
null

If you liked this article you might like

FANG Stocks Only Outperform in Odd Years: Here Are 18 Alternative Picks for 2018

FANG Stocks Only Outperform in Odd Years: Here Are 18 Alternative Picks for 2018

Closing the Door on Abiomed

Closing the Door on Abiomed

Capturing Profits on AIG

Capturing Profits on AIG

A Roundup of My Open Positions

A Roundup of My Open Positions

Pumped Up About Abiomed Collar Play

Pumped Up About Abiomed Collar Play