Abcam (ABCM) Shares Rocket Skywards Today

By Susan Ramirez • Friday, June 16 12:14 • Permanent Link

Shares of Mid-cap Biotechnology company Abcam were up 11.8% during today's afternoon session, as the S&P 500 posted a 0.0% change. Today's upwards movement shows that investor interest in ABCM stock is strong -- but how closely have they studied the company's margins?

While Abcam's gross margins for the last year are positive, we are concerned that the company's operating margins are in the red. Gross margins take into account only the cost of revenue, or variable costs -- meaning the cost directly associated with producing the products or providing the service offered by the company.

Operating margins, on the other hand, take into account the company's overhead as well. Overhead, also called fixed costs, includes the company's rent, salaries for personnel not included in cost of revenue, equipment and supplies, amortization, and depreciation. Operating margins tell you about how efficiently Abcam is run, and gross margins tell you how profitable its product line is.

Date Reported	Revenue ($ k)	Cost of Revenue ($ k)	Gross Margins (%)	YoY Growth (%)
2022-12-31	361,700	91,200	74.79	5.03
2021-12-31	315,400	90,800	71.21	0.08
2021-06-30	297,700	85,900	71.15	2.65
2020-06-30	260,000	79,800	69.31	n/a
2019-06-30	259,900	76,700	n/a	n/a

Date Reported	Total Revenue ($ k)	Operating Expenses ($ k)	Operating Margins (%)	YoY Growth (%)
2022-12-31	361,700	280,600	-2.79	-224.0
2021-12-31	315,400	217,500	2.25	-80.7
2021-06-30	297,700	177,100	11.66	-15.57
2020-06-30	260,000	144,300	13.81	n/a
2019-06-30	259,900	106,200	n/a	n/a

Despite the negative operating margins in the last year, Abcam's average is still positive, indicating that the company is generally profitable. There's a red flag, however, indicating that the last year could be part of a negative trend. Abcam's operating expenses are growing at an average rate of 18.1%, whilst its revenues are growing at only 8.6%.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.