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Reasons to Add Intuitive Surgical (ISRG) to Your Portfolio Now
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Intuitive Surgical, Inc. (ISRG - Free Report) is well poised for growth in the coming quarters, courtesy of its strength in robotics. The optimism, led by solid first-half 2023 results and its progress on the artificial intelligence (AI) front, is expected to contribute further. Risks pertaining to procedure adoption and stiff competition persist.
Shares of this Zacks Rank #3 (Hold) company have risen 17.1% year to date against the industry’s 4.9% decline. The S&P 500 Index has gained 19.4% during the same time frame.
Intuitive Surgical, the pioneer of robotic-assisted surgery and the renowned provider of minimally invasive care, has a market capitalization of $109.41 billion. It projects 13.3% growth over the next five years and expects to maintain its strong performance going forward.
Image Source: Zacks Investment Research
The company’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed the same in one, delivering an average surprise of 3.03%.
Let’s delve deeper.
Strength in Robotics: We are upbeat about Intuitive Surgical’s robot-based da Vinci surgical system that enables minimally-invasive surgery and reduces the trauma associated with open surgery. The da Vinci System is powered by robotic technology that has provided the company with solid exposure to medical mechatronics, robotics and AI for the healthcare space.
On ISRG’s third-quarter 2023 earnings call, the installed base of the da Vinci system grew approximately 13% year over year. The utilization of clinical systems in the field, measured by procedures per system, was up 6% from the prior-year quarter’s level.
Progress on the AI Front: We are also positive about the growing adoption of minimally-invasive robot-assisted surgeries, self-automated home-based care, the use of information technology for quick and improved patient care, and the shift of the payment system to a value-based model. These indicate the high prevalence of AI in the MedTech space.
Per management, the rise of medical mechatronics, powerful computing, improved sensing, microfabrication and molecular imaging have enabled new solutions to old problems. AI has been enhancing Intuitive Surgical’s product portfolio with clinical applications, diagnostic support, operational efficiency, electronic health record systems, practice workflows and supply-chain management.
Strong Q3 Results: ISRG’s solid third-quarter 2023 results also buoy optimism. Revenues were primarily driven by continued growth in the company’s da Vinci procedure volume. Intuitive Surgical has also been raising the price of procedures to fight inflationary pressure that also aided sales growth.
Meanwhile, the absence of any significant disruptions from COVID-19 during the third quarter seems promising, which may accelerate procedure growth going forward. Although gross margin contracted, operating margin improved during the third quarter (as anticipated). The declining trend in operating expenses is likely to continue in the fourth quarter of 2023.
Downsides
Risk of Procedure Adoption: Intuitive Surgical faces the risk of adoption of its procedures. This is because adoption growth takes time, as each procedure needs to gain credibility. Furthermore, the wide use of the company’s products requires training of surgical teams. Market acceptance could be delayed by the time required to complete such trainings.
Intuitive Surgical is witnessing a positive estimate revision trend for 2023. In the past 60 days, the Zacks Consensus Estimate for its earnings has moved up 1 cent to $5.58 per share.
The consensus mark for the company’s fourth-quarter 2023 revenues is pegged at $1.86 billion, indicating an 11.7% improvement from the year-ago quarter’s reported number.
Stocks to Consider
Some better-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , Biodesix (BDSX - Free Report) and Integer Holdings Corporation (ITGR - Free Report) .
DaVita, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 18.3%. DVA’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 36.55%. You can see the complete list of today’s Zacks #1 Rank stocks here.
DaVita’s shares have risen 35.9% year to date compared with the industry’s 2.3% growth.
Biodesix, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 32.3% for 2024. BDSX’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, delivering an average surprise of 9.76%.
Biodesix’s shares have lost 35.2% year to date compared with the industry’s 11.9% decline.
Integer Holdings, sporting a Zacks Rank of 1 at present, has an estimated long-term growth rate of 15.8%. ITGR’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 11.9%.
Integer Holdings’ shares have rallied 27.4% year to date against the industry’s 4.9% decline.
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Reasons to Add Intuitive Surgical (ISRG) to Your Portfolio Now
Intuitive Surgical, Inc. (ISRG - Free Report) is well poised for growth in the coming quarters, courtesy of its strength in robotics. The optimism, led by solid first-half 2023 results and its progress on the artificial intelligence (AI) front, is expected to contribute further. Risks pertaining to procedure adoption and stiff competition persist.
Shares of this Zacks Rank #3 (Hold) company have risen 17.1% year to date against the industry’s 4.9% decline. The S&P 500 Index has gained 19.4% during the same time frame.
Intuitive Surgical, the pioneer of robotic-assisted surgery and the renowned provider of minimally invasive care, has a market capitalization of $109.41 billion. It projects 13.3% growth over the next five years and expects to maintain its strong performance going forward.
Image Source: Zacks Investment Research
The company’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed the same in one, delivering an average surprise of 3.03%.
Let’s delve deeper.
Strength in Robotics: We are upbeat about Intuitive Surgical’s robot-based da Vinci surgical system that enables minimally-invasive surgery and reduces the trauma associated with open surgery. The da Vinci System is powered by robotic technology that has provided the company with solid exposure to medical mechatronics, robotics and AI for the healthcare space.
On ISRG’s third-quarter 2023 earnings call, the installed base of the da Vinci system grew approximately 13% year over year. The utilization of clinical systems in the field, measured by procedures per system, was up 6% from the prior-year quarter’s level.
Progress on the AI Front: We are also positive about the growing adoption of minimally-invasive robot-assisted surgeries, self-automated home-based care, the use of information technology for quick and improved patient care, and the shift of the payment system to a value-based model. These indicate the high prevalence of AI in the MedTech space.
Per management, the rise of medical mechatronics, powerful computing, improved sensing, microfabrication and molecular imaging have enabled new solutions to old problems. AI has been enhancing Intuitive Surgical’s product portfolio with clinical applications, diagnostic support, operational efficiency, electronic health record systems, practice workflows and supply-chain management.
Strong Q3 Results: ISRG’s solid third-quarter 2023 results also buoy optimism. Revenues were primarily driven by continued growth in the company’s da Vinci procedure volume. Intuitive Surgical has also been raising the price of procedures to fight inflationary pressure that also aided sales growth.
Meanwhile, the absence of any significant disruptions from COVID-19 during the third quarter seems promising, which may accelerate procedure growth going forward. Although gross margin contracted, operating margin improved during the third quarter (as anticipated). The declining trend in operating expenses is likely to continue in the fourth quarter of 2023.
Downsides
Risk of Procedure Adoption: Intuitive Surgical faces the risk of adoption of its procedures. This is because adoption growth takes time, as each procedure needs to gain credibility. Furthermore, the wide use of the company’s products requires training of surgical teams. Market acceptance could be delayed by the time required to complete such trainings.
Intuitive Surgical, Inc. Price
Intuitive Surgical, Inc. price | Intuitive Surgical, Inc. Quote
Estimate Trend
Intuitive Surgical is witnessing a positive estimate revision trend for 2023. In the past 60 days, the Zacks Consensus Estimate for its earnings has moved up 1 cent to $5.58 per share.
The consensus mark for the company’s fourth-quarter 2023 revenues is pegged at $1.86 billion, indicating an 11.7% improvement from the year-ago quarter’s reported number.
Stocks to Consider
Some better-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , Biodesix (BDSX - Free Report) and Integer Holdings Corporation (ITGR - Free Report) .
DaVita, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 18.3%. DVA’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 36.55%. You can see the complete list of today’s Zacks #1 Rank stocks here.
DaVita’s shares have risen 35.9% year to date compared with the industry’s 2.3% growth.
Biodesix, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 32.3% for 2024. BDSX’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, delivering an average surprise of 9.76%.
Biodesix’s shares have lost 35.2% year to date compared with the industry’s 11.9% decline.
Integer Holdings, sporting a Zacks Rank of 1 at present, has an estimated long-term growth rate of 15.8%. ITGR’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 11.9%.
Integer Holdings’ shares have rallied 27.4% year to date against the industry’s 4.9% decline.