Abiomed: Small Premium For Access To ~11% Normalized ROIC


  • Abiomed came in with another set of robust earnings yesterday, with double-digit growth from top to bottom.
  • Earnings remain steady, however, the company exhibits the profitability features investors are paying a premium for.
  • Valuations are supporting, and we look to be paying a ~300bps premium for access to the above premia investors are searching for in FY22.
  • We remain unchanged on our previous rating of buy and valuation of $388, respectively.

X-ray image, links, artificial heart pacemaker

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Investment summary

The long-term buy thesis for Abiomed, Inc. (NASDAQ:ABMD) remains fully intact following the company’s Q1 FY23 earnings posted yesterday. After a double-digit gain from the top to bottom line, the company also saw strengths in

ABMD stock 6-month price action

Data: Refinitiv Eikon

Abiomed Q1 FY23 earnings

Data: ABMD 10-K August 4, 2022

Abiomed forward earnings forecasts FY23-FY25

Data: HB Insights Estimates

ABMD return on investment continues to push higher and normalizes at ~11%

Data: HB Insights, ABMD SEC Filings

ABMD Multiples and comps

Data: HB Insights

ABMD stock valuation

Data: HB Insights Estimates

Disclosure: I/we have a beneficial long position in the shares of ABMD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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