Abaxis Inc (ABAX) is a strong player in the vet diagnostics space, as the company has built up its portfolio by adding rapid assay products, opening a reference lab and obtaining rights to i-STAT, resulting in solid revenue growth for the past two to three years, says Jonathan Block, Managing Director at Stifel, Nicolaus & Co., Inc.
“Abaxis over the years has built out their portfolio by adding stuff such as rapid assays, reference lab and i-STAT,” Block said. “I think their offering is stronger today than what it was a couple of years ago, and I also think that they are going to be a beneficiary, again a modest beneficiary, but a beneficiary nevertheless of the altered distributor landscape, if you would. That’s going to result in some modest share gains going forward.”
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Block believes that a robust bundle in the vet diagnostics space is important to gain share, and he points to ABAX‘s achievement in that are over the past 12 to 24 months as a reason behind the company’s solid revenue growth.
“They’ve cobbled together a bunch of technologies and expanded their offering, resulting in very solid revenue growth for the past two to three years. Now they have got to figure out a way to stabilize, if not increase, margins. So you see that revenue growth flow effectively down to the bottom line,” Block said.
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