Abiomed Inc. (NASDAQ:ABMD)

The analysis of the financial ratios over the given periods reveals several noteworthy trends.

Price to earnings (P/E) ratio

The P/E ratio exhibited significant fluctuations from 2017 to 2022. It peaked in 2018 at 156.41, followed by a sharp decline in 2019 to 45.76 and a slight further decrease in 2020 to 43.48. However, the ratio increased again in 2021 and 2022, reaching 78.69. This volatility suggests varying market expectations about future earnings and potential changes in profitability or investor sentiment.

Price to operating profit (P/OP) ratio

The P/OP ratio mirrored the P/E trend to some extent. It started at 66.06 in 2017, rose substantially to 111.65 in 2018, then dropped markedly to 52.72 in 2019 and further to 35.41 in 2020. An upward trend resumed in 2021 and 2022, with the ratio increasing to 76.33. This pattern indicates fluctuations in the market valuation relative to operating profit, reflecting shifts in operational performance or market perceptions.

Price to sales (P/S) ratio

The P/S ratio saw a peak in 2018 at 29.55, doubling from 13.37 in 2017, followed by a steady decline to 15.4 in 2019 and further down to 10.5 by 2020. A moderate recovery occurred in 2021, reaching 14.96, but the ratio declined again to 10.41 in 2022. This overall downward trend points to a decreasing market premium on the company's sales over time, possibly indicating slowing revenue growth or market reevaluation of sales quality.

Price to book value (P/BV) ratio

The P/BV ratio followed a similar pattern with a peak in 2018 at 25.44, then a consistent decline over the next years to reach 7.15 in 2022. The decrease suggests the market's diminishing valuation relative to the book value of the company, which may reflect changes in the company’s asset base, profitability, or investor confidence in the company's intrinsic value.

In summary, the financial ratios collectively indicate that after reaching peaks around 2018, market valuations relative to earnings, operating profit, sales, and book value decreased considerably through 2020, with some partial recovery seen in later years, especially in earnings and operating profit metrics. The trends imply a period of shifting market expectations and changing perceptions of the company’s financial performance and value.

The financial data reveals several key trends and patterns over the analyzed periods.

Share price

The share price experienced significant volatility between 2017 and 2022. It surged sharply from $135.88 in 2017 to a peak of $394.46 in 2018, indicating a strong market enthusiasm or positive investor sentiment during that period. This was followed by a notable decline to $196.32 in 2020. Subsequently, the price recovered to $280 in 2021 but then decreased again to $235.75 in 2022. Overall, the trend shows a high degree of fluctuation with substantial gains initially, followed by correction and partial recovery.

Earnings per share (EPS)

EPS demonstrated an overall upward trend from 2017 through 2019, increasing from $1.19 to $5.74, suggesting improving profitability during these years. However, in 2020 there was a decline to $4.52, followed by a slight rebound to $4.98 in 2021. The EPS then dropped significantly to $3 in 2022, indicating some challenges in maintaining earnings growth in the later periods.

Price-to-earnings (P/E) ratio

The P/E ratio was extremely high in 2017 and 2018, at 114.25 and 156.41 respectively, reflecting very high market expectations relative to earnings at those times. This ratio decreased substantially by 2019 and 2020 to around 45, suggesting a moderation in market valuation possibly due to improved earnings or a share price decline. However, the P/E ratio rose again in 2021 and 2022, reaching 56.24 and then 78.69, which may indicate renewed investor optimism or a decrease in earnings relative to share price.

Share Price Trend

The share price exhibited significant volatility over the analyzed period. Starting at $135.88 in March 2017, it increased sharply to $394.46 by March 2018. Following this peak, the price declined to $262.64 in 2019 and further to $196.32 in 2020. In 2021, the share price recovered to $280 before decreasing again to $235.75 in 2022. Overall, the share price demonstrated periods of rapid appreciation followed by notable corrections.

Operating Profit Per Share

Operating profit per share showed a steady upward trend from $2.06 in 2017 to a peak of $5.54 in 2020. After 2020, the operating profit per share declined to $5.07 in 2021 and further to $3.09 in 2022. The growth phase from 2017 through 2020 suggests improvement in operational efficiency or profitability, but the subsequent decrease in the last two years indicates possible challenges impacting earnings.

Price to Operating Profit Ratio (P/OP)

The P/OP ratio highlights fluctuations in market valuation relative to operating profit. Initially, the ratio was 66.06 in 2017, rising substantially to 111.65 in 2018, coinciding with a peak in share price and growing investor optimism. The ratio then dropped sharply to 52.72 in 2019 and reached its lowest point of 35.41 in 2020, indicating increased operating profit relative to price or market undervaluation. In 2021, the ratio increased again to 55.25 and further to 76.33 in 2022, reflecting a combination of declining operating profit and fluctuating share price affecting market perception.

Overall Insights

The data suggests that market sentiment and company profitability experienced significant shifts over the analyzed timeframe. A sharp increase in share price and P/OP ratio in 2018 was followed by more conservative valuation levels despite an increase in operating profit to 2020. The downward trend in operating profit per share after 2020, along with rising P/OP ratios, could signal emerging operational or market challenges. The volatility in share price reflects sensitivity to these factors and possibly changing investor expectations.

The analysis of the financial data over the periods ending March 31 from 2017 to 2022 reveals several notable trends in share price, sales per share, and the price-to-sales (P/S) ratio.

Share Price

The share price experienced significant volatility during the period. Initially, it surged from 135.88 US$ in 2017 to a peak of 394.46 US$ in 2018, indicating strong investor confidence or favorable market conditions at that time. Subsequently, the share price declined to 262.64 US$ in 2019 and further dropped to 196.32 US$ in 2020. After this decline, the price recovered partially to 280 US$ in 2021 before decreasing again to 235.75 US$ in 2022. Overall, the share price shows a pattern of sharp rise followed by a substantial correction and moderate fluctuations thereafter.

Sales Per Share

Sales per share demonstrated a consistent upward trajectory across all periods, increasing from 10.16 US$ in 2017 to 22.64 US$ in 2022. This steady growth signifies improving revenue generation on a per-share basis, doubling over the six-year span, which suggests operational expansion or enhanced market penetration.

Price-to-Sales (P/S) Ratio

The P/S ratio also exhibited marked fluctuations. It rose from 13.37 in 2017 to a peak of 29.55 in 2018, mirroring the sharp increase in share price observed in that year. However, the ratio then declined significantly to 15.4 in 2019, further decreased to 10.5 in 2020, before slightly recovering to 14.96 in 2021 and falling again to 10.41 in 2022. This pattern reflects the interplay between share price and sales growth, with valuation multiples contracting after an initial spike despite the continuous rise in sales per share.

In summary, the data reflects a strong initial market valuation spike in 2018, followed by a period of correction and more stabilized financial metrics. Sales per share growth remains consistent and robust, suggesting fundamental business growth, whereas the P/S ratio's volatility indicates changing market perceptions regarding the company's valuation relative to its sales.

Share Price

The share price exhibited significant fluctuations over the analyzed periods. It increased sharply from $135.88 in 2017 to a peak of $394.46 in 2018. Subsequently, the price declined to $262.64 in 2019 and further decreased to $196.32 in 2020. After that, there was a recovery to $280 in 2021, followed by a moderate decline to $235.75 in 2022. The trend shows notable volatility with a major peak in 2018 and a general downward movement afterwards, despite a temporary rebound in 2021.

Book Value Per Share (BVPS)

BVPS demonstrated a consistent upward trend throughout the period. Starting at $10.32 in 2017, it rose steadily each year, reaching $32.99 in 2022. This increase suggests ongoing growth in the company's net asset value per share, reflecting improvements in equity or retained earnings over time.

Price-to-Book Value Ratio (P/BV)

The P/BV ratio showed a declining trend overall. Initially, it was very high at 13.17 in 2017 and peaked sharply at 25.44 in 2018, coinciding with the peak in share price. After 2018, the ratio dropped significantly to 12.65 in 2019 and continued to decrease each year, reaching a low of 7.15 in 2022. This decline indicates that the market price has become more aligned with the book value per share over time, potentially reflecting a market adjustment after the elevated valuations seen in 2018.