Credit: Shutterstock photoIntuitive Surgical, IncISRG is currently a top performer in the MedTech space. Improved price performance, better-than-expected earnings results, significant exposure to Artificial Intelligence (AI) trends in healthcare and strong fundamentals instill investors' optimism in the stock.
Intuitive Surgical outperformed its industry in a year's time. The company's shares surged almost 59.7%, against the industry's decline of 6%. The current level is also higher than the S&P 500 index's rise of 17.7% over the same time frame.
Which Way are the Estimates Treading?
Intuitive Surgical has witnessed favorable estimate revision trend of late.
For 2018, the Zacks Consensus Estimate for revenues is pegged at $3.69 billion, reflecting year-over-year growth of 17.9%. The same for earnings is pinned at $10.74, showing year-over-year growth of 19.5%. For investors' notice, the estimates for earnings increased 4.7% year over year.
Buoyed by favorable analyst sentiments, Intuitive Surgical carries a Zacks Rank #2 (Buy). This signifies probabilities of the stock's outperformance in the near term.
Intuitive Surgical, Inc. Price and Consensus
Intuitive Surgical, Inc. Price and Consensus | Intuitive Surgical, Inc. Quote
What Makes Intuitive Surgical an Attractive Pick?
Solid Earnings Surprise History
Notably, the company pulled off a positive average earnings surprise of 21.6% in the trailing four quarters.
Intuitive Surgical reported adjusted earnings of $2.76 per share in the second quarter of 2018, which beat the Zacks Consensus Estimate of $2.48. Adjusted earnings improved 38% year over year.
Revenues totaled $909.3 million, up 19.8% from the prior-year quarter's tally. The figure also surpassed the Zacks Consensus Estimate of $870 million. The upside was backed by higher worldwide da Vinci procedures led by growth in U.S. general surgery procedures and global urologic procedures.
Guidance
For 2018, Intuitive Surgical continues to expect adjusted gross profit margin in the range of 70-71.5% of net revenues. Management expects non-cash stock compensation expenses between $245 million and $255 million.
Intuitive Surgical forecasts 2018 procedure growth in the range of 14.5-16.5%, up from the previous band of 12-15%. Non-cash stock compensation expenses are expected between $245 million and $255 million in 2018.
Intuitive Surgical forecasts other income, which includes mostly interest income, between $70 million and $75 million, up from the previous guidance of $55 million and $60 million.
Strength in Robotics - da Vinci Surgical System
Intuitive Surgical's robot-based da Vinci surgical system enables minimally-invasive surgery that lowers trauma associated with open surgery. The da Vinci System is powered by robotic technology which has provided the company with a solid exposure to Mechatronics, Robotics and AI for healthcare.
Recently, the da Vinci Surgical System has been observed to cure patients diagnosed with inguinal hernia. FDA clearance of da Vinci SP surgical system for neurologic surgical procedures is a major development in the platform.
In the second quarter of 2018, da Vinci procedures grew approximately 18% from the year-ago quarter's tally. Intuittive Surgical replaced 220 da Vinci surgical systems, up 32.5% year over year. 72% of the systems placed in the quarter were da Vinci Xi and 21% were da Vinci X systems. The company's installed base grew 12% year over year.
Want More from the MedTech Space?
A few other top-ranked stocks in the MedTech space are Inogen Inc INGN , Integer Holdings Corporation ITGR and The Cooper Companies COO . Inogen has a Zacks Rank #2 (Buy). Integer and The Cooper Companies sport a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Inogen has a long-term expected earnings growth rate of 22.5%, while the same for Integer Holdings and The Cooper Companies is at 15% and 10.8%, respectively.
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Intuitive Surgical, Inc. (ISRG): Free Stock Analysis Report
Inogen, Inc (INGN): Free Stock Analysis Report
Integer Holdings Corporation (ITGR): Free Stock Analysis Report
The Cooper Companies, Inc. (COO): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
