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.