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Intuitive Surgical, Inc. (ISRG - Free Report) is still taking it on the chin due to the latest COVID pandemic restrictions in the US and Europe. As a result, this Zacks Rank #5 (Strong Sell) has seen its 2021 earnings estimates cut.
Intuitive Surgical makes and markets the da Vinci surgical system, which is one of the leading robotic-assisted, minimally invasive surgery systems.
Another Big Beat in the Fourth Quarter of 2020
On Jan 21, Intuitive Surgical reported its fourth quarter earnings and beat the Zacks Consensus by $0.48. Earnings were $3.58 versus the consensus of $3.10.
It was the 7th consecutive earnings surprise.
The company has a great earnings surprise track record. It has only missed twice in the last 5 years.
However, impacts from COVID continued to hit Intuitive's business, which relies on the hospitals being open for surgeries.
Worldwide da Vinci procedures rose 6% year-over-year but this was slower growth which reflected the impacts of the disruptions caused by the pandemic.
It shipped 326 da Vinci Surgical Systems, a decline of 3% from the prior year's period.
Revenue managed to rise 4% year-over-year to $1.33 billion from $1.28 billion in 2019.
No Full Year 2021 Guidance
Given the extent of the COVID pandemic disruptions, which continued into the fourth quarter and to start 2021, Intuitive Surgical would not provide 2021 full year guidance.
However, it said on the conference call that volumes worsened in December and that that trend continued into January, especially in the US and Europe, due to new coronavirus restrictions and shut downs.
For example, procedures in California rose 8% year-over-year in October 2020 but by December, were down 6% from the year before as the number of COVID cases rose.
The first half of 2021 looks to be especially challenging for Intutitive, at least until the pandemic starts to ease.
As a result, the analysts are bearish on full year earnings.
9 of them cut after the earnings report, sending the 2021 Zacks Consensus down to $12.21 from $13.08.
That's still earnings growth of 20.2% compared to 2020 when earnings slid to just $10.16 due to the pandemic.
But the analyst agreement on the cuts to the 2021 earnings estimates is the reason that Intuitive Surgical has dropped to a Zacks Rank #5 (Strong Sell).
The Zacks Rank is a short-term recommendation of 1 to 3 months.
Shares Near 5-Year Highs: Too Hot to Handle?
Intutitive Surgical has been a hot stock for the last 5 years, gaining 347% versus the S&P 500's gains of 111% over that same time period.
In the last year, it's jumped another 31% even though it's seen COVID impacts.
It's trading near multi-year highs once again.
But shares now trade with a rich valuation with a forward P/E of 66.
It's price-to-sales ratio isn't much better, coming in at 22.4.
For investors who are interested in owning a piece of this juggernaut, it might be best to wait on the sidelines for a possible pullback for a better entry point.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Bear of the Day: Intuitive Surgical (ISRG)
Intuitive Surgical, Inc. (ISRG - Free Report) is still taking it on the chin due to the latest COVID pandemic restrictions in the US and Europe. As a result, this Zacks Rank #5 (Strong Sell) has seen its 2021 earnings estimates cut.
Intuitive Surgical makes and markets the da Vinci surgical system, which is one of the leading robotic-assisted, minimally invasive surgery systems.
Another Big Beat in the Fourth Quarter of 2020
On Jan 21, Intuitive Surgical reported its fourth quarter earnings and beat the Zacks Consensus by $0.48. Earnings were $3.58 versus the consensus of $3.10.
It was the 7th consecutive earnings surprise.
The company has a great earnings surprise track record. It has only missed twice in the last 5 years.
However, impacts from COVID continued to hit Intuitive's business, which relies on the hospitals being open for surgeries.
Worldwide da Vinci procedures rose 6% year-over-year but this was slower growth which reflected the impacts of the disruptions caused by the pandemic.
It shipped 326 da Vinci Surgical Systems, a decline of 3% from the prior year's period.
Revenue managed to rise 4% year-over-year to $1.33 billion from $1.28 billion in 2019.
No Full Year 2021 Guidance
Given the extent of the COVID pandemic disruptions, which continued into the fourth quarter and to start 2021, Intuitive Surgical would not provide 2021 full year guidance.
However, it said on the conference call that volumes worsened in December and that that trend continued into January, especially in the US and Europe, due to new coronavirus restrictions and shut downs.
For example, procedures in California rose 8% year-over-year in October 2020 but by December, were down 6% from the year before as the number of COVID cases rose.
The first half of 2021 looks to be especially challenging for Intutitive, at least until the pandemic starts to ease.
As a result, the analysts are bearish on full year earnings.
9 of them cut after the earnings report, sending the 2021 Zacks Consensus down to $12.21 from $13.08.
That's still earnings growth of 20.2% compared to 2020 when earnings slid to just $10.16 due to the pandemic.
But the analyst agreement on the cuts to the 2021 earnings estimates is the reason that Intuitive Surgical has dropped to a Zacks Rank #5 (Strong Sell).
The Zacks Rank is a short-term recommendation of 1 to 3 months.
Shares Near 5-Year Highs: Too Hot to Handle?
Intutitive Surgical has been a hot stock for the last 5 years, gaining 347% versus the S&P 500's gains of 111% over that same time period.
In the last year, it's jumped another 31% even though it's seen COVID impacts.
It's trading near multi-year highs once again.
But shares now trade with a rich valuation with a forward P/E of 66.
It's price-to-sales ratio isn't much better, coming in at 22.4.
For investors who are interested in owning a piece of this juggernaut, it might be best to wait on the sidelines for a possible pullback for a better entry point.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>