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Here's Why You Should Invest in Intuitive Surgical (ISRG) Now
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Intuitive Surgical, Inc. (ISRG - Free Report) is well-poised for growth on improving adoption of da Vinci Surgical System and strong international presence.
Shares of the company have gained 44.2% compared with the industry’s growth of 11.8% in a year’s time. Meanwhile, the S&P 500 Index has rallied 33.7% in the same time frame.
The company, with a market capitalization of $118.23 billion, designs, manufactures and markets the da Vinci surgical system and related instruments and accessories. The da Vinci surgical system is an advanced robot-assisted surgical system. It anticipates earnings to improve 9.7% over the next five years. It has beat estimates in each of the trailing four quarters, the average surprise being 28.2%.
Image Source: Zacks Investment Research
Let’s take a closer look at the factors that substantiate the company’s Zacks Rank #2 (Buy).
What’s Favoring the Stock?
Intuitive Surgical’s robot-based da Vinci surgical system enables minimally-invasive surgery, which reduces risks associated with open surgery. The company continues to gain from this system, which in turn bolsters overall performance.
On an overall basis, the recovery of procedures happened gradually during third-quarter 2020 and attained approximately 90% of pre-COVID-19 levels by the end of that quarter.
In the first quarter of 2021, da Vinci procedures improved 16% and the momentum continued in the second quarter, when the company witnessed 68% growth. Intuitive Surgical placed 6,335 da Vinci surgical systems in the second quarter, with the installed base growing 10% year over year. On the back of stronger recovery in procedures so far, the company currently projects procedure growth of 27-30% in 2021.
With respect to digital capabilities, the company remains focused on improving its ecosystem. During the second quarter, Intuitive Surgical continued to engage customers in data analytics and opportunity analysis for surgical programs, which is the cornerstone of its Your Data, Your Truth analytics efforts. The company advanced with the launch of My Intuitive, which is a mobile app enabling surgeons to manage their da Vinci experience, log into da Vinci systems, manage their training, and view their operative data from the palm of their hand. It has been of great help amid this public health crisis.
During the second quarter, the company introduced this app to first users in Europe. The company’s digital learning programs continue to be a crucial part of its overall learning initiatives. Cumulatively, these programs trained above 2,200 care team members in the second quarter, thereby demonstrating organizational strength and localizing programs, and responding with agility to pandemic-driven demand.
The company is gradually gaining prominence in markets outside the United States. Outside the United States, revenues totaled $458.2 million, up 44.7% on a year-over-year basis. This was driven by substantial growth in procedure volume owing to higher prostatectomy procedures and earlier-stage growth in kidney cancer procedures, general surgery, gynecology, and thoracic. Outside the United States, the company 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.
Estimates Trend
Intuitive Surgical has been witnessing an upward estimate revision trend for 2021. In the past 60 days, the Zacks Consensus Estimate for its earnings has moved north by 8.4% to $14.72.
The Zacks Consensus Estimate for third-quarter 2021 revenues is pegged at $1.40 billion, suggesting growth of 29.9% from the year-ago reported number.
Image: Bigstock
Here's Why You Should Invest in Intuitive Surgical (ISRG) Now
Intuitive Surgical, Inc. (ISRG - Free Report) is well-poised for growth on improving adoption of da Vinci Surgical System and strong international presence.
Shares of the company have gained 44.2% compared with the industry’s growth of 11.8% in a year’s time. Meanwhile, the S&P 500 Index has rallied 33.7% in the same time frame.
The company, with a market capitalization of $118.23 billion, designs, manufactures and markets the da Vinci surgical system and related instruments and accessories. The da Vinci surgical system is an advanced robot-assisted surgical system. It anticipates earnings to improve 9.7% over the next five years. It has beat estimates in each of the trailing four quarters, the average surprise being 28.2%.
Image Source: Zacks Investment Research
Let’s take a closer look at the factors that substantiate the company’s Zacks Rank #2 (Buy).
What’s Favoring the Stock?
Intuitive Surgical’s robot-based da Vinci surgical system enables minimally-invasive surgery, which reduces risks associated with open surgery. The company continues to gain from this system, which in turn bolsters overall performance.
On an overall basis, the recovery of procedures happened gradually during third-quarter 2020 and attained approximately 90% of pre-COVID-19 levels by the end of that quarter.
In the first quarter of 2021, da Vinci procedures improved 16% and the momentum continued in the second quarter, when the company witnessed 68% growth. Intuitive Surgical placed 6,335 da Vinci surgical systems in the second quarter, with the installed base growing 10% year over year. On the back of stronger recovery in procedures so far, the company currently projects procedure growth of 27-30% in 2021.
With respect to digital capabilities, the company remains focused on improving its ecosystem. During the second quarter, Intuitive Surgical continued to engage customers in data analytics and opportunity analysis for surgical programs, which is the cornerstone of its Your Data, Your Truth analytics efforts. The company advanced with the launch of My Intuitive, which is a mobile app enabling surgeons to manage their da Vinci experience, log into da Vinci systems, manage their training, and view their operative data from the palm of their hand. It has been of great help amid this public health crisis.
During the second quarter, the company introduced this app to first users in Europe. The company’s digital learning programs continue to be a crucial part of its overall learning initiatives. Cumulatively, these programs trained above 2,200 care team members in the second quarter, thereby demonstrating organizational strength and localizing programs, and responding with agility to pandemic-driven demand.
The company is gradually gaining prominence in markets outside the United States. Outside the United States, revenues totaled $458.2 million, up 44.7% on a year-over-year basis. This was driven by substantial growth in procedure volume owing to higher prostatectomy procedures and earlier-stage growth in kidney cancer procedures, general surgery, gynecology, and thoracic. Outside the United States, the company 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.
Estimates Trend
Intuitive Surgical has been witnessing an upward estimate revision trend for 2021. In the past 60 days, the Zacks Consensus Estimate for its earnings has moved north by 8.4% to $14.72.
The Zacks Consensus Estimate for third-quarter 2021 revenues is pegged at $1.40 billion, suggesting growth of 29.9% from the year-ago reported number.
Other Stocks to Consider
Some other top-ranked stocks from the broader medical space are Henry Schein, Inc. (HSIC - Free Report) , Envista Holdings Corporation (NVST - Free Report) ) and West Pharmaceutical Services, Inc. (WST - Free Report) , each currently carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Henry Schein’s long-term earnings growth rate is estimated at 13.9%.
Envista Holdings’ long-term earnings growth rate is estimated at 27.4%.
West Pharmaceutical’s long-term earnings growth rate is projected at 28.4%.