Financial Analysis: ABIOMED (ABMD) & Varian Medical Systems (VAR)
ABIOMED (NASDAQ: ABMD) and Varian Medical Systems (NYSE:VAR) are both mid-cap medical companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, risk, valuation, institutional ownership, earnings, analyst recommendations and profitability.
This table compares ABIOMED and Varian Medical Systems’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Varian Medical Systems||9.50%||24.70%||11.12%|
Institutional and Insider Ownership
91.1% of ABIOMED shares are owned by institutional investors. Comparatively, 99.0% of Varian Medical Systems shares are owned by institutional investors. 7.0% of ABIOMED shares are owned by company insiders. Comparatively, 0.9% of Varian Medical Systems shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
This is a breakdown of current ratings and recommmendations for ABIOMED and Varian Medical Systems, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Varian Medical Systems||2||5||3||0||2.10|
ABIOMED presently has a consensus target price of $157.50, indicating a potential upside of 2.73%. Varian Medical Systems has a consensus target price of $93.69, indicating a potential downside of 7.44%. Given ABIOMED’s stronger consensus rating and higher probable upside, equities analysts clearly believe ABIOMED is more favorable than Varian Medical Systems.
Risk & Volatility
ABIOMED has a beta of 0.2, meaning that its share price is 80% less volatile than the S&P 500. Comparatively, Varian Medical Systems has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500.
Valuation and Earnings
This table compares ABIOMED and Varian Medical Systems’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|ABIOMED||$474.78 million||14.17||$110.92 million||$1.69||90.72|
|Varian Medical Systems||$3.27 billion||2.84||$643.00 million||$3.04||33.30|
Varian Medical Systems has higher revenue and earnings than ABIOMED. Varian Medical Systems is trading at a lower price-to-earnings ratio than ABIOMED, indicating that it is currently the more affordable of the two stocks.
ABIOMED Company Profile
ABIOMED, Inc. is a provider of temporary percutaneous mechanical circulatory support devices. The Company offers care to heart failure patients. The Company operates in the segment of the research, development and sale of medical devices to assist or replace the pumping function of the failing heart. The Company develops, manufactures and markets products that are designed to enable the heart to rest, heal and recover by improving blood flow to the coronary arteries and end-organs and/or temporarily performing the pumping function of the heart. The Company’s product portfolio includes the Impella 2.5, Impella CP, Impella RP, Impella LD, Impella 5.0 and AB5000. The Company’s products are used in the cardiac catheterization lab (cath lab), by interventional cardiologists, the electrophysiology lab, the hybrid lab and in the heart surgery suite by heart surgeons.
Varian Medical Systems Company Profile
Varian Medical Systems, Inc. is a manufacturer of medical devices and software for treating cancer and other medical conditions with radiotherapy, radiosurgery, proton therapy and brachytherapy medical devices and software for treating cancer and other medical conditions with radiotherapy, radiosurgery, proton therapy and brachytherapy. The Company also has Varian Particle Therapy (VPT) and the operations of the Ginzton Technology Center (GTC). Its VPT business develops, designs, manufactures, sells and services products and systems for delivering proton therapy, another form of external beam radiotherapy using proton beams for the treatment of cancer. Its ProBeam system is capable of delivering intensity modulated proton therapy (IMPT) using pencil beam scanning technology. Its ProBeam Compact is a single room proton therapy product.
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