Stock Analysis on Net

Abiomed Inc. (NASDAQ:ABMD)

$22.49

This company has been moved to the archive! The financial data has not been updated since November 3, 2022.

Enterprise Value to FCFF (EV/FCFF)

Microsoft Excel

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Free Cash Flow to The Firm (FCFF)

Abiomed Inc., FCFF calculation

US$ in thousands

Microsoft Excel
12 months ended: Mar 31, 2022 Mar 31, 2021 Mar 31, 2020 Mar 31, 2019 Mar 31, 2018 Mar 31, 2017
Net income
Net noncash charges
Changes in assets and liabilities
Net cash provided by operating activities
Cash paid for interest on capital lease obligation, net of tax1
Purchases of property and equipment
Property and equipment under capital lease obligation
Free cash flow to the firm (FCFF)

Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).


Net Cash Provided by Operating Activities
The net cash generated from operating activities exhibited a consistent upward trend from March 31, 2017, through March 31, 2020, increasing from $115,116 thousand in 2017 to a peak of $314,920 thousand in 2020. This growth indicates improving operational cash generation capabilities over this period. However, in the subsequent years, 2021 and 2022, there is a noticeable decline to $274,578 thousand and $285,390 thousand respectively, which, despite being a reduction from the 2020 peak, still remains significantly higher than the levels seen in earlier years. This suggests some volatility or possibly increasing operational costs or changes in working capital.
Free Cash Flow to the Firm (FCFF)
Free cash flow to the firm also shows a general increasing trend from 2017 to 2020, starting at $48,119 thousand and reaching $270,914 thousand by 2020. Similar to the operating cash flow pattern, the years 2021 and 2022 exhibit a decline in FCFF to $221,195 thousand and $249,627 thousand respectively. This decline following the 2020 peak may reflect increased capital expenditures, investments, or other financial considerations impacting free cash flow generation after that year.
Overall Insights
The financial performance over the six-year period reflects strong growth in cash-generating activities through 2020, followed by a moderate contraction in the last two years reported. The reduction in both operating cash flow and free cash flow after 2020 suggests changes in business dynamics or external factors affecting financial operations. Despite the decline, both metrics remain notably above the earlier years, indicating overall positive cash flow performance relative to the start of the period.

Interest Paid, Net of Tax

Abiomed Inc., interest paid, net of tax calculation

US$ in thousands

Microsoft Excel
12 months ended: Mar 31, 2022 Mar 31, 2021 Mar 31, 2020 Mar 31, 2019 Mar 31, 2018 Mar 31, 2017
Effective Income Tax Rate (EITR)
EITR1
Interest Paid, Net of Tax
Cash paid for interest on capital lease obligation, before tax
Less: Cash paid for interest on capital lease obligation, tax2
Cash paid for interest on capital lease obligation, net of tax

Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).

1 See details »

2 2022 Calculation
Cash paid for interest on capital lease obligation, tax = Cash paid for interest on capital lease obligation × EITR
= × =


Effective Income Tax Rate (EITR)
The effective income tax rate exhibited considerable fluctuation during the analyzed periods. Initially, it stood at a high 43% in fiscal year 2017. This rate then experienced a significant decline, dropping sharply to 17.1% in 2018 and further plummeting to a notably low 1.6% in 2019. However, from 2020 onwards, the rate reversed this downward trend, rising to 21% in 2020 and maintaining a slight increase, reaching 21.8% in 2021 and 28.4% in 2022. This pattern suggests pronounced volatility in the company's tax expense relative to its income, potentially driven by changes in tax regulations, income levels, or tax planning strategies across these years.
Cash Paid for Interest on Capital Lease Obligation, Net of Tax
Data for cash paid for interest on capital lease obligations is only available for fiscal years 2017 and 2018, showing amounts of $202,000 and $250,000 respectively. The absence of data for subsequent years prevents further trend analysis. The slight increase between 2017 and 2018 may reflect changes in lease obligations or interest rates, but with limited data, comprehensive conclusions cannot be drawn.

Enterprise Value to FCFF Ratio, Current

Abiomed Inc., current EV/FCFF calculation, comparison to benchmarks

Microsoft Excel
Selected Financial Data (US$ in thousands)
Enterprise value (EV)
Free cash flow to the firm (FCFF)
Valuation Ratio
EV/FCFF
Benchmarks
EV/FCFF, Competitors1
Abbott Laboratories
CVS Health Corp.
Elevance Health Inc.
Intuitive Surgical Inc.
Medtronic PLC
UnitedHealth Group Inc.
EV/FCFF, Sector
Health Care Equipment & Services
EV/FCFF, Industry
Health Care

Based on: 10-K (reporting date: 2022-03-31).

1 Click competitor name to see calculations.

If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.


Enterprise Value to FCFF Ratio, Historical

Abiomed Inc., historical EV/FCFF calculation, comparison to benchmarks

Microsoft Excel
Mar 31, 2022 Mar 31, 2021 Mar 31, 2020 Mar 31, 2019 Mar 31, 2018 Mar 31, 2017
Selected Financial Data (US$ in thousands)
Enterprise value (EV)1
Free cash flow to the firm (FCFF)2
Valuation Ratio
EV/FCFF3
Benchmarks
EV/FCFF, Competitors4
Abbott Laboratories
CVS Health Corp.
Elevance Health Inc.
Intuitive Surgical Inc.
Medtronic PLC
UnitedHealth Group Inc.
EV/FCFF, Sector
Health Care Equipment & Services
EV/FCFF, Industry
Health Care

Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).

1 See details »

2 See details »

3 2022 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =

4 Click competitor name to see calculations.


Enterprise Value (EV)
The enterprise value exhibited significant volatility over the period analyzed. Initially, it rose sharply from approximately 5.74 billion USD in 2017 to a peak of around 17.18 billion USD in 2018. Following this peak, the EV declined noticeably to about 11.36 billion USD in 2019, and continued to decrease to approximately 8.38 billion USD in 2020. Subsequently, EV increased again to nearly 12.1 billion USD in 2021 before declining once more to just under 10 billion USD in 2022. This pattern suggests fluctuating market perceptions or valuation adjustments over the years.
Free Cash Flow to the Firm (FCFF)
The free cash flow to the firm showed a consistent upward trend throughout the analyzed years. Starting from roughly 48.1 million USD in 2017, FCFF nearly tripled to about 136.9 million USD in 2018, continued increasing to 208.2 million USD in 2019, and reached a higher level of 270.9 million USD in 2020. Although FCFF decreased slightly to 221.2 million USD in 2021, it rebounded to 249.6 million USD in 2022. Overall, FCFF growth indicates improving operational cash generation capability with minor fluctuations in the later years.
EV/FCFF Ratio
The EV/FCFF ratio demonstrated a marked decline from an elevated starting point of 119.3 in 2017 to a low of 30.94 in 2020. The ratio fell significantly between 2018 and 2020, reflecting a faster increase in FCFF relative to EV or a decrease in valuation multiples. After 2020, the ratio rose again to 54.7 in 2021 before declining to 39.99 in 2022. This indicates periods of valuation compression followed by partial expansion and subsequent moderation, which may be indicative of changing market sentiment, risk perception, or profitability expectations.