Market Overview

Why Is Abiomed Down 25%? Traders Say Future Growth To Blame

Why Is Abiomed Down 25%? Traders Say Future Growth To Blame

  • Shares of ABIOMED, Inc. (NASDAQ: ABMD) plunged lower by more than 25 percent on Thursday.
  • The company reported its second-quarter results and raised its fiscal 2016 guidance Thursday morning.
  • Traders attributed the selloff to the company's growth profile losing momentum.
  • Shares of Abiomed, a provider of temporary percutaneous mechanical circulatory support devices, tumbled more than 25 percent on Thursday, despite issuing a "beat and raise" report earlier in the day.

    Abiomed announced Thursday morning that it earned $0.17 per share in its second quarter on revenue of $76.4 million, up from 47 percent a year ago. Analysts were expecting the company to earn $0.16 per share on revenue of $74.59 million. The company also raised its full-year revenue guidance to a range of $305 million to $315 million from a prior $300 million to $310 million.

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    The Announcements

    "We have had an exciting start to fiscal year 2016 with first half revenue growth of 49 percent and establishment of Protected PCI™ as a new indication. As evidenced by our patient growth and awareness at TCT, Protected PCI has been validated by physicians that treat higher risk patients requiring percutaneous hemodynamic support in the cath lab," said Michael R. Minogue, CEO of Abiomed in a press release.

    "We are confident that in the years ahead, Abiomed will deliver strong growth, support new indications and countries, and launch new best in class products. As always, Abiomed is committed to meaningfully impacting the lives of our patients and helping our physicians improve outcomes."

    Traders' Take

    It is unusual for a stock to sell off so sharply following a "beat and raise" print. Traders whom Benzinga spoke to attributed the decline to profit taking, as the stock has risen from around $40 per share in February 2014 to a high of $110.68 in mid-August.

    Traders also attributed the decline to a more tepid growth profile, as the company's growth story is not expected to remain as strong as it has been in the past.

    The issue also saw unusually heavy trading volume. According to Google Finance, the stock trades on average 736,567 shares per day. However, the stock traded over four million times with two hours still lift in the trading session.

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