Reviewing ABIOMED (NASDAQ:ABMD) and ABAXIS (ABAX)

ABIOMED (NASDAQ: ABMD) and ABAXIS (NASDAQ:ABAX) are both medical companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, profitability, risk, institutional ownership, analyst recommendations and dividends.

Profitability

This table compares ABIOMED and ABAXIS’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ABIOMED 16.13% 13.03% 10.98%
ABAXIS 11.98% 10.18% 8.84%

Institutional & Insider Ownership

89.5% of ABIOMED shares are held by institutional investors. Comparatively, 97.3% of ABAXIS shares are held by institutional investors. 7.0% of ABIOMED shares are held by insiders. Comparatively, 4.3% of ABAXIS shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares ABIOMED and ABAXIS’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
ABIOMED $474.78 million 16.82 $110.92 million $1.69 107.14
ABAXIS $227.78 million 4.91 $49.81 million $1.20 41.10

ABIOMED has higher revenue and earnings than ABAXIS. ABAXIS is trading at a lower price-to-earnings ratio than ABIOMED, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings for ABIOMED and ABAXIS, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ABIOMED 0 2 6 0 2.75
ABAXIS 1 4 1 0 2.00

ABIOMED currently has a consensus price target of $180.43, indicating a potential downside of 0.35%. ABAXIS has a consensus price target of $47.63, indicating a potential downside of 3.44%. Given ABIOMED’s stronger consensus rating and higher probable upside, research analysts plainly believe ABIOMED is more favorable than ABAXIS.

Dividends

ABAXIS pays an annual dividend of $0.56 per share and has a dividend yield of 1.1%. ABIOMED does not pay a dividend. ABAXIS pays out 46.7% of its earnings in the form of a dividend.

Risk & Volatility

ABIOMED has a beta of 0.27, indicating that its share price is 73% less volatile than the S&P 500. Comparatively, ABAXIS has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500.

Summary

ABIOMED beats ABAXIS on 13 of the 16 factors compared between the two stocks.

ABIOMED Company Profile

ABIOMED, Inc. is a provider of temporary percutaneous mechanical circulatory support devices. The Company offers care to heart failure patients. The Company operates in the segment of the research, development and sale of medical devices to assist or replace the pumping function of the failing heart. The Company develops, manufactures and markets products that are designed to enable the heart to rest, heal and recover by improving blood flow to the coronary arteries and end-organs and/or temporarily performing the pumping function of the heart. The Company’s product portfolio includes the Impella 2.5, Impella CP, Impella RP, Impella LD, Impella 5.0 and AB5000. The Company’s products are used in the cardiac catheterization lab (cath lab), by interventional cardiologists, the electrophysiology lab, the hybrid lab and in the heart surgery suite by heart surgeons.

ABAXIS Company Profile

Abaxis, Inc. is a developer, manufacturer and marketer of portable blood analysis systems that are used in medical specialties in human or veterinary patient care to provide clinicians with blood constituent measurements. The Company markets and sells its products around the world through independent distributors and direct sales force. The Company’s segments are the medical market and the veterinary market. The Company’s medical market products include Piccolo chemistry analyzers and consumable products. The Company develops, manufactures and sells the Piccolo Xpress chemistry analyzer for use in human patient care to provide clinicians with blood constituent measurements. The Company’s veterinary market product offerings include VetScan chemistry analyzers and veterinary reagent discs, VetScan hematology instruments and related reagent kits, VetScan VSpro specialty analyzers and related consumables, VetScan i-STAT analyzers and related consumables and VetScan rapid tests.

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