Intuitive Surgical Hits a 52-Week High on Solid Prospects

Zacks Equity Research
Updated

Share price of Intuitive Surgical Inc ISRG scaled a new 52-week high of $400 on Nov 17, eventually closing a bit lower at $392.48. The company has gained 19.8% over the last three months, much better than the S&P 500’s 6.4% rise and the broader industry’s gain of 6.3%. Taking the stock’s stable performance into consideration, we expect Intuitive Surgical to scale higher in the coming quarters. The company’s long-term growth of 9.2% also holds promise.

Average volume of shares traded over the last three months was remarkable at approximately 807.4K. The stock has a market cap of $43.9 billion. Over the last 60 days, four analysts have raised the earnings estimates for the current year, while one has slashed the same. The net effect has taken the Zacks Consensus Estimate to $8.60 from $7.87 per share for the period.

 

 

Catalysts

The Sunnyvale, CA-based company posted an impressive third-quarter peformance with both earnings and revenues having registered a year-over-year increase in the quarter. The company also witnessed growth in all the segments. The international performance was encouraging too.

More good news is that the market is upbeat about Intuitive Surgical’s procedure performance in Asia that showed continued strength with solid growth in China, Japan and Korea. The company gained significantly on the CE Mark approval for da Vinci X in Europe. The stock received further boost on the recent FDA approval of the same.

We believe that the increasing adoption of Intuitive Surgical’s da Vinci system among physicians for general surgery, oncology, urology and gynecology procedures is a key growth catalyst. Also, growing procedural volumes outside the United States, open up considerable opportunities for the company.

Additionally, a solid outlook for the coming quarters raises investors’ confidence in the stock. Further, incremental spending on product development and higher investments in international markets are prudent moves that are likely to drive long-term growth. The company is also expected to enhance organizational capabilities and gain prominence in the markets of Europe and Asia.

Zacks Rank & Key Picks

Intuitive Surgical carries a Zacks Rank #3 (Hold). A few better-ranked medical stocks are PetMed Express, Inc. PETS, Align Technology, Inc. ALGN and Myriad Genetics, Inc. MYGN, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

PetMed has a long-term expected earnings growth rate of 10%. The stock has rallied roughly 76.6% over a year.

Align Technologyhas a long-term expected earnings growth rate of 28.9%. The stock has soared 163.9% in a year’s time.

Myriad Genetics has a long-term expected earnings growth rate of 15%. The stock has surged 91.6% in a year.

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