Back to top

Image: Bigstock

Will Intuitive Surgical (ISRG) Gain on Rising Earnings Estimates?

Read MoreHide Full Article

Intuitive Surgical (ISRG - Free Report) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving.

The upward trend in estimate revisions for this robotic surgery system company reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. This insight is at the core of our stock rating tool -- the Zacks Rank.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

For Intuitive Surgical, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate Revisions

The company is expected to earn $2.96 per share for the current quarter, which represents a year-over-year change of +4.59%.

Over the last 30 days, the Zacks Consensus Estimate for Intuitive Surgical has increased 5.27% because five estimates have moved higher while one has gone lower.

Current-Year Estimate Revisions

The company is expected to earn $12.01 per share for the full year, which represents a change of +9.28% from the prior-year number.

There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, 10 estimates have moved up for Intuitive Surgical versus no negative revisions. This has pushed the consensus estimate 8.04% higher.

Favorable Zacks Rank

Thanks to promising estimate revisions, Intuitive Surgical currently carries a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

Intuitive Surgical shares have added 5.7% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Intuitive Surgical, Inc. (ISRG) - free report >>

Published in