I’ve had May 3rd circled on my calendar in anticipation of this moment. As I write this, one of my top healthcare picks is rallying over 10% after trouncing earnings expectations. This medical device company has a near-monopoly on a business that is saving lives every day. I’m so confident about this company’s earnings potential that I recommend it in three of my newsletters. What company am I referring to? Find out below.
ABIOMED, Inc. (ABMD) is the only medical devices company that provides technologies that replace or assist the pumping function of a failing heart. This is a big deal because heart disease accounts for some 800,000 deaths in the U.S. alone each year. So ABIOMED provides a life-saving service to tens of thousands of patients and their families.
ABIOMED is best known for its Impella devices, which are the world’s smallest heart pumps. Impella is often a safe treatment option for patients with advanced heart failure that have been turned down for open heart surgery. Last year, ABIOMED announced that it surpassed 50,000 patients who are treated with Impella devices in the U.S.
Given strong demand for medical devices to treat heart disease, ABIOMED’s business is booming. This was made clear in today’s earnings report.
For the fourth quarter, net income soared 147% to $36.8 million, or $0.83 per share. Excluding special items, adjusted earnings came in at $0.80 per share. Over the same period, revenue improved 40% to $174.4 million. Analysts were expecting $0.64 EPS on $164.3 million in revenue, so ABIOMED posted a whopping 25% earnings surprise and a 6.1% sales surprise.
For FY 2018, net income surged 115% to $112.2 million, or $2.54 per share. Excluding special items, adjusted earnings came in at $2.45 per share. Over the same period, revenue jumped 33% to $593.7 million. ABIOMED also beat analysts’ estimates for FY 2017; with a Street view of $2.30 EPS on $583.7 million in revenue, the company posted a 6.5% earnings surprise and a 1.7% sales surprise.
ABIOMED also released its outlook for FY 2019. The company is targeting revenues between $740 million and $770 million, or between 25% and 30% annual sales growth. ABIOMED also expects operating margin to range between 28% and 30%.
All-in-all, this was a stunning earnings report, so ABMD shares rallied after the announcement. I currently recommend this stock in my Blue Chip Growth, Ultimate Growth and Platinum Growth Club newsletters. I see plenty of upside potential for this top healthcare pick, so ABMD is an A-rated Strong Buy.