uploads/2018/09/hand-2308932_1920.jpg

Do Abiomed’s Valuations Look Attractive?

By

Updated

Abiomed’s valuation

Abiomed (ABMD) is a leading medical devices company. Its revenues rose 36% YoY to ~$180 million in fiscal Q1 2019 compared to $133 million in Q1 2018. The chart below compares revenues and EPS for Abiomed since the first quarter of 2018.

Article continues below advertisement

Forward PE

On September 5, the company was trading at a forward PE multiple of ~85.5x as compared to the industry average of ~20.5x. Medtronic (MDT), Abbott Laboratories (ABT), and Boston Scientific (BSX) are trading at lower forward PE multiples of 18.2x, 21.2x, and 23.1x, respectively, as compared to Abiomed.

Forward EV-to-EBITDA multiple

On a capital structure neutral and excess cash-adjusted basis, Abiomed currently trades at a forward EV-to-EBITDA multiple of ~64.9x, which is higher than the industry’s average of ~16.4x as of September 5. Medtronic (MDT), Abbott Laboratories (ABT), and Boston Scientific (BSX) are trading at a forward EV-to-EBITDA multiple of 14.4x, 16.3x, and 18.2x, respectively.

Forward EV-to-revenues multiple

Abiomed currently trades at a forward EV-to-revenues multiple of ~20.6x, which is higher than the industry’s average of ~4.7x as of September 5. Medtronic (MDT), Abbott Laboratories (ABT), and Boston Scientific (BSX) are trading at a forward EV-to-revenues multiple of 4.7x, 4.2x, and 5.3x, respectively.

The Health Care Select Sector SPDR ETF (XLV) holds 0.5% of its total investment in Abiomed (ABMD), 3.6% in Medtronic (MDT), 1.4% in Boston Scientific (BSX), and 3.3% in Abbott Laboratories (ABT).

Advertisement

More From Market Realist