Category: ISRG

ISRG – Intuitive Surgical, Inc. (ISRG) Up 10% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for Intuitive Surgical, Inc. (ISRG Free Report) . Shares have added about 10% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Intuitive Surgical, Inc. due for a pullback? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Intuitive Surgical Q2 Earnings & Revenues Top Estimates

Intuitive Surgical, Inc. reported second-quarter 2021 adjusted earnings per share of $3.92, which beat the Zacks Consensus Estimate of $3.16 by 24.1%. The bottom line improved significantly on a year-over-year basis.

GAAP earnings per share in the quarter was $4.25, compared with the year-ago quarter’s figure of 57 cents.

Revenue Details

The company reported revenues of $1.46 billion, which soared 71.8% from the prior-year quarter. The top line outpaced the Zacks Consensus Estimate by 13.9%.

Segment Details

Instruments & Accessories

Revenues at the segment amounted to $796.4 million, reflecting year-over-year improvement of 72.8%. This can be attributed to 68% growth in da Vinci procedure volume.

Systems

In the reported quarter, System revenues soared 68.4% year over year to $439.6 million. In fact, the company shipped 328 da Vinci Surgical Systems in the quarter, compared to 178 systems in the prior-year quarter.

Services

Services revenues were $228 million, up 74.9% from the year-ago quarter.

Outside the United States, revenues totaled $458.2 million, up 44.7% on a year-over-year basis.

Outside the United States, Intuitive Surgical placed 115 systems in the second quarter compared with 72 in the prior-year quarter. Of these, 63 were in Europe, 16 in Japan and 19 in China.

Margins

Adjusted gross profit in the reported quarter was $1.05 billion, up 97.4% year over year. As a percentage of revenues, gross margin in the quarter was 71.7%, up 930 basis points (bps).

Adjusted operating income totaled $629.9 million, up 225.9% year over year. As a percentage of revenues, operating margin in the quarter was 43%, up 2030 bps.

Financial Position

The company exited the second quarter with cash, cash equivalents and investments of $7.73 billion, compared with $7.23 billion in the previous quarter.

Total assets were $12.29 billion, compared with $11.54 billion sequentially.

Outlook

Due to persistent uncertainty surrounding the extent and duration of the pandemic, and the timing of global recovery and economic normalization; the company cannot ascertain the future impact on its operations and financial performance during this time. Consequently, the company has refrained from issuing any guidance for 2021.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 14.32% due to these changes.

VGM Scores

At this time, Intuitive Surgical, Inc. has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren’t focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Intuitive Surgical, Inc. has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

ISRG – Intuitive Surgical, Inc. (ISRG) Stock Moves -0.37%: What You Should Know

Intuitive Surgical, Inc. (ISRG Free Report) closed at $950.11 in the latest trading session, marking a -0.37% move from the prior day. This change was narrower than the S&P 500’s 0.75% loss on the day.

Prior to today’s trading, shares of the company had gained 7.76% over the past month. This has outpaced the Medical sector’s loss of 4.84% and the S&P 500’s gain of 2.74% in that time.

Investors will be hoping for strength from ISRG as it approaches its next earnings release, which is expected to be July 20, 2021. The company is expected to report EPS of $3.16, up 184.68% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.28 billion, up 50.77% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $13.58 per share and revenue of $5.37 billion. These totals would mark changes of +33.66% and +23.16%, respectively, from last year.

Any recent changes to analyst estimates for ISRG should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. ISRG is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note ISRG’s current valuation metrics, including its Forward P/E ratio of 70.25. This valuation marks a premium compared to its industry’s average Forward P/E of 43.97.

We can also see that ISRG currently has a PEG ratio of 7.49. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. ISRG’s industry had an average PEG ratio of 3.07 as of yesterday’s close.

The Medical – Instruments industry is part of the Medical sector. This group has a Zacks Industry Rank of 212, putting it in the bottom 17% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

ISRG – Here's Why Intuitive Surgical, Inc. (ISRG) is a Great Momentum Stock to Buy

Momentum investing revolves around the idea of following a stock’s recent trend in either direction. In the ‘long’ context, investors will be essentially be “buying high, but hoping to sell even higher.” With this methodology, taking advantage of trends in a stock’s price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.

Even though momentum is a popular stock characteristic, it can be tough to define. Debate surrounding which are the best and worst metrics to focus on is lengthy, but the Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.

Below, we take a look at Intuitive Surgical, Inc. (ISRG Free Report) , a company that currently holds a Momentum Style Score of B. We also talk about price change and earnings estimate revisions, two of the main aspects of the Momentum Style Score.

It’s also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Intuitive Surgical, Inc. Currently has a Zacks Rank of #1 (Strong Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of A or B outperform the market over the following one-month period.

You can see the current list of Zacks #1 Rank Stocks here >>>

Set to Beat the Market?

Let’s discuss some of the components of the Momentum Style Score for ISRG that show why this company shows promise as a solid momentum pick.

Looking at a stock’s short-term price activity is a great way to gauge if it has momentum, since this can reflect both the current interest in a stock and if buyers or sellers have the upper hand at the moment. It is also useful to compare a security to its industry, as this can help investors pinpoint the top companies in a particular area.

For ISRG, shares are up 3.95% over the past week while the Zacks Medical – Instruments industry is up 2.65% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 3.71% compares favorably with the industry’s 8.49% performance as well.

Considering longer term price metrics, like performance over the last three months or year, can be advantageous as well. Shares of Intuitive Surgical, Inc. Have increased 22.16% over the past quarter, and have gained 54.77% in the last year. In comparison, the S&P 500 has only moved 8.17% and 43.13%, respectively.

Investors should also take note of ISRG’s average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. Right now, ISRG is averaging 538,653 shares for the last 20 days.

Earnings Outlook

The Zacks Momentum Style Score encompasses many things, including estimate revisions and a stock’s price movement. Investors should note that earnings estimates are also significant to the Zacks Rank, and a nice path here can be promising. We have recently been noticing this with ISRG.

Over the past two months, 6 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost ISRG’s consensus estimate, increasing from $12.31 to $13.58 in the past 60 days. Looking at the next fiscal year, 6 estimates have moved upwards while there have been no downward revisions in the same time period.

Bottom Line

Given these factors, it shouldn’t be surprising that ISRG is a #1 (Strong Buy) stock and boasts a Momentum Score of B. If you’re looking for a fresh pick that’s set to soar in the near-term, make sure to keep Intuitive Surgical, Inc. On your short list.

ISRG – Here's My Top Stock to Buy in June

You’ve no doubt heard the old investment adage, “Sell in May and go away.” The idea is to get out of stocks until later in the year when your chances of positive returns are better. Perhaps that strategy works at times, but I’ve always thought that the best time to buy shares of a great company with tremendous long-term growth prospects is always sooner rather than later.

The fact is, there are stocks with these characteristics that are strong picks right now. There’s no need to wait months to invest in them. Actually, such a move could be counterproductive. While there are several stocks that I think are worth checking out, my top stock to buy in June is Intuitive Surgical (NASDAQ:ISRG).

Surgeons using a da Vinci robotic surgical system.

Image source: Intuitive Surgical.

A solid reopening play

My hunch is that buying Intuitive Surgical shares in June rather than waiting until autumn will pay off. Why? Because the company should benefit from the reopening of the economies in the U.S., Europe, and Asia.

Intuitive took it on the chin in 2020 with the COVID-19 pandemic. Hospitals delayed non-emergency surgical procedures as they at first braced for and then experienced a surge in COVID-19 cases. This caused the number of procedures performed with Intuitive’s da Vinci robotic surgical systems to decline. And the company’s revenue uncharacteristically fell as well.

ISRG Revenue (Quarterly) Chart

ISRG Revenue (Quarterly) data by YCharts

The worst appears to be over for Intuitive Surgical. However, CFO Marshall Mohr noted in the company’s Q1 update that “resurgences of COVID-19 and its variants, like those currently being experienced in parts of Europe and the U.S., have challenged hospital care capabilities, and have negatively impacted da Vinci procedures.” 

This negative impact should taper off as more people receive COVID-19 vaccines. Several drugmakers are already testing vaccine candidates that specifically target emerging coronavirus variants. It likely won’t be long before Intuitive’s business is fully back on its strong pre-pandemic growth track.

Thinking long-term

Even if Intuitive Surgical wasn’t a strong reopening play, I’d still view the stock as a good one to buy in June. As my Motley Fool colleague Alex Carchidi recently pointed out, Intuitive is an “evergreen stock.” In other words, pretty much any time is a good time to buy the stock.

The main reason why that’s the case is that Intuitive Surgical’s long-term growth prospects are outstanding. In 2020, more than 1.2 million procedures were performing using the company’s robotic surgical systems, up slightly from the prior year despite the pandemic. Intuitive estimates that there are around 6 million procedures performed each year for which it already has products and regulatory clearances. 

There’s even better news, though. Roughly 20 million soft tissue surgical procedures are performed annually that are ideal candidates for robotic assistance. Intuitive continues to develop new technological innovations that will enable it to target this even larger market opportunity.

Remember that those numbers reflect what’s in place today. Aging demographic trends across the world will drive increased demand for many of the surgical procedures for which Intuitive’s systems are used for years to come.

One noteworthy challenge

Throughout most of the more than two decades that Intuitive Surgical has been in business, it had the robotic surgical systems market to itself. That’s no longer the case.

Large rivals such as Johnson & Johnson and Medtronic now offer surgical robots. Smaller companies including Asensus Surgical (formerly known as TransEnterix) are also vying for market share. Some potential rivals don’t directly compete against Intuitive yet. However, without question, Intuitive faces more competition than it ever has.

Can Intuitive meet this challenge? I think so. The company has a huge head start with a large install base. Existing customers have financial incentives to maximize their return on investment with their da Vinci systems. They also clearly like Intuitive Surgical. The company enjoys a net promoter score (NPS), which measures customer loyalty, at the top end of the range of NPS scores categorized as “excellent.”

New customers should continue to be attracted to Intuitive Surgical as well. The company’s track record is unsurpassed. Its training programs and other resources offered to customers are also key pluses. And Intuitive continues to invest in innovation so that it stays at the top of the industry.

My view is that the robotic surgical systems market is and will remain big enough to support multiple winners. However, I’m confident that Intuitive Surgical will be the biggest winner of all over the long run. This healthcare stock is in a league of its own. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

ISRG – 10 Words From Intuitive Surgical's CEO That Could Mean Billions for Investors

Hospitals overwhelmed by COVID-19 outbreaks have had to reschedule a lot of elective operations over the past year and a half. This hasn’t been great for businesses that rely on increasing procedure volume, like Intuitive Surgical (NASDAQ:ISRG)

While the pandemic has depressed sales growth in the present, there are plenty of signs to suggest that Intuitive Surgical’s best days are still just ahead. During the company’s first-quarter earnings call, CEO Gary Guthart said he was “seeing adjustments in the healthcare system that favor our offerings.”

Here are a few of the big adjustments that those 10 words were referring to.

Surgeon manipulating a surgical robot.

Image source: Getty Images.

Telepresence program

Training surgical teams to use da Vinci surgical systems is an important but often overlooked aspect of Intuitive’s business. In fact, training as many surgeons as quickly as possible is one of the best ways for the company to stay ahead of the competition.

Trends we’ve seen in the telehealth space for everyday consumers have spilled over into the medical field. A global pandemic that left no other options for training has done wonders for the adoption of the company’s long-distance services.

In the first quarter of 2020, just 5% of case observations took place through My Intuitive, the company’s mobile application for surgeons. In the first quarter of 2021, though, that figure had soared to 45% as travel restrictions made it nearly impossible to observe procedures in person.

The number of surgeons using surgical simulations to sharpen their skills also rose sharply. First-quarter simulation usage jumped 46% year over year.

Single-port systems

Intuitive Surgical offers surgeons around 70 different instruments for use in its multiport surgical platforms, but they’ll probably see less use over time. That’s because minimally invasive surgery performed by inserting multiple instruments through a single incision is an increasingly popular option.

The da Vinci surgical systems that made Intuitive famous are almost entirely of the multiple port variety, but the company’s new single-port (SP) offerings are quickly gaining steam. In the first quarter, the company placed six new da Vinci SP systems, bringing the total to 67 in the U.S. and 8 in South Korea.

Intuitive’s single-port offering has been approved by the Food and Drug Administration to tackle just a couple of common procedures so far, but this list will expand. A clinical trial that could help da Vinci SP become the go-to option for colon cancer patients is expected to begin in the U.S. this summer. 

Lung tumor biopsies

Lung cancer isn’t the most commonly diagnosed malignancy, but it is the most deadly. New targeted treatments are highly effective, but oncologists can’t choose one until they know exactly which genetic mutations are driving their patients’ disease. Intuitive Surgical’s Ion endoluminal system is a flexible tool custom-built to safely retrieve tumor samples embedded deep in a patient’s lung.

During the first quarter, Intuitive Surgical installed 14 new Ion machines in the U.S., bringing the total to 50. All working Ion systems are in the U.S. at the moment, but soaring demand abroad could make this product a huge success. In 2015, China reported more than 787,000 new lung cancer diagnoses. An aging, urbanizing population means this figure will soon pass 1 million annually, if it hasn’t already.

Blood-based diagnostic tools from Guardant Health (NASDAQ:GH) and its peers are gaining traction, but liquid biopsies can only detect DNA that breaks free from tumor cells. As a relatively safe way to perform lung biopsies, Intuitive Surgical’s Ion systems could be a major revenue stream down the road. 

A buy now?

At recent prices, Intuitive Surgical shares aren’t cheap. The stock has been trading at around 68.5 times forward earnings expectations, which implies a great deal of success. 

Investors don’t want to let go of any Intuitive Surgical shares, but this probably isn’t the best time to buy more, either. At their current valuation, there are better healthcare stocks to buy right now.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

ISRG – Why Intuitive Surgical Stock Surged Today

What happened

Shares of Intuitive Surgical (NASDAQ:ISRG) climbed 10% Wednesday after the maker of advanced surgical systems delivered strong first-quarter financial results.  

So what

Intuitive Surgical’s revenue rose 18% year over year to $1.3 billion. The gains were fueled by a 26% jump in da Vinci Surgical System shipments and a 16% increase in procedures.

The medical device maker ended the quarter with an installed base of 6,142 da Vinci systems, up 8% from the year-ago period.

A bar chart is rising in a stair-step manner.

Investors bid up Intuitive Surgical’s stock price following its Q1 earnings release. Image source: Getty Images.

Intuitive Surgical’s profits were also impressive. Its operating income soared 47% to $417 million.

“We are pleased with this quarter’s performance,” CEO Gary Guthart said in a press release. “Our performance reflects customers choosing Intuitive as COVID eases.” 

Now what

Hospitals were forced to delay surgeries during the early stages of the coronavirus pandemic as they prioritized the treatment of COVID-19 patients. With vaccinations ramping up and case counts plateauing in many locations, medical facilities now appear to be resuming elective procedures at a faster rate than many investors expected. This, plus a backlog of deferred surgeries, bodes well for Intuitive Surgical’s sales and profits in the coming quarters.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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