Is Abaxis (ABAX) Worth Adding to Your Investment Portfolio? - Analyst Blog

On Nov 20, Zacks Investment Research upgraded home health and hospice care provider Abaxis Inc. (ABAX) to a Zacks Rank #2 (Buy).

Why the Upgrade?

We are impressed with Abaxis' encouraging second-quarter fiscal 2015 financial results wherein both the top and the bottom line topped the respective Zacks Consensus Estimate. Since the promising earnings announcement, the company's stock price has surged 18.1% to close at $56.88 yesterday.

Abaxis reported second-quarter fiscal 2015 earnings per share of 24 cents, beating the Zacks Consensus Estimate by 2 cents. Earnings in the reported quarter also exceeded the year-ago number by 33.3%.Revenues of $53.9 million were up 17.6% year over year due to higher sales volumes. The top line also handily beat the Zacks Consensus Estimate of $50 million. Healthy margin expansion also contributed to the upside.

Abaxis continues as a strong player in the veterinary market, which accounted for for 82.5% of its total revenue in the second quarter of fiscal 2015, up a solid 20.1% year over year. The company is currently focusing on balancing the excess inventory in the channel.In the reported quarter, the company signed Patterson Companies Inc. (PDCO) as its new distributor, which helped it win a contract of $1.6 million worth of stocking orders.

In the medical market, the company observed an increasing demand for its easy-to-use portable point-of-care blood analyzer useful in treating Ebola patients in medical centers. We believe this product will generate more demand given the timing of the virus outbreak, in turn, positively contributing to the company's overall revenue growth.

Other Stocks to Consider

Investors interested in the medical product sector may also consider stocks like ICU Medical, Inc. (ICUI) and OraSure Technologies, Inc. (OSUR). Both the stocks carry a Zacks Rank #2.

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ABAXIS INC (ABAX): Free Stock Analysis Report
 
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