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Why Is Intuitive Surgical (ISRG) Up 5.4% Since the Last Earnings Report?
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It has been about a month since the last earnings report for Intuitive Surgical, Inc. (ISRG - Free Report) . Shares have added about 5.4% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Intuitive Surgical Beats on Q1 Earnings & Revenues
Intuitive Surgical posted adjusted earnings of $4.67 per share in the first quarter of 2017, crushing the Zacks Consensus Estimate of $3.97 on stellar revenue growth. Also, the figure improved 27.2% on a year-over-year basis. Interestingly, over the past four trailing quarters, the company beat estimates at an average of 11.55%.
Revenues increased 13% year over year to $674 million, driven by growth in recurring instrument, accessory and service, and systems revenue. Revenues also beat the Zacks Consensus Estimate of $661 million.
Business Highlights
Intuitive Surgical posted solid numbers in the quarter, courtesy of rising customer adoption of procedures and growth in system placements.
Worldwide da Vinci procedure volumes grew approximately 18% year over year, thanks to stellar performances in the U.S. general surgery and worldwide urologic procedures. Notably, the company shipped 133 da Vinci surgical systems, up from 110 in the first quarter of 2016.
Revenue Details
Instruments and Accessories: Revenues at the segment grew 18.2% to $380.8 million in the quarter, driven by strong procedure growth and increased sales of stapling and vessel sealing products. Revenues realized per procedure were approximately $1,840 compared with $1,830 in the year-ago quarter.
System: Sales increased 3.6% to $153.2 million buoyed by higher revenues from operating lease activities. Intuitive Surgical placed 133 system orders in the quarter, up from 110 in the year-ago quarter. Management at Intuitive Surgical noted that 21 systems were placed under operating lease transactions, compared with 19 systems in the year-ago quarter. At the end of the quarter, there were 95 systems in the field under operating leases.
Service: The Company registered revenues of $140.2 million, up 12.6% on a year-over-year basis on growth in the installed base of da Vinci systems.
International Growth
Per management, the company posted revenues of $183 million outside the U.S., up 12% from the first quarter of 2016.
The company placed 56 system orders, compared with 36 in the year-ago quarter and 63 in the fourth quarter. These included 21 orders in Europe, seven in Korea, six in India, six in Japan and two in China.
Financial Update
Intuitive Surgical ended the first quarter of 2017 with $3.1 billion in cash, cash equivalents, and investments, down by $1.7 billion on a year-over-year basis.
Outlook
Intuitive Surgical plans to launch an upgrade to the company’s flagship Vinci Xi technology – da Vinci X. In this regard, management confirmed the submission of documents for the CE Mark approval for Vinci X. Furthermore, the company expects availability of this device in Europe by the second quarter.
For the second quarter, the company expects procedure growth rate to slow down a bit outside the U.S.
Intuitive Surgical anticipates full-year 2017 procedure growth within 12% to 14%, up from the previously provided range of 9% to 12%.
Full-year 2017 gross profit margin is expected in the upper end of the previously provided range of 69% to 71% of net revenue.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimate flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.
At this time, the stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with a 'D'. Following the exact same course, the stock was allocated also a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, stocks has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our styles scores.
Outlook
The stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
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Why Is Intuitive Surgical (ISRG) Up 5.4% Since the Last Earnings Report?
It has been about a month since the last earnings report for Intuitive Surgical, Inc. (ISRG - Free Report) . Shares have added about 5.4% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Intuitive Surgical Beats on Q1 Earnings & Revenues
Intuitive Surgical posted adjusted earnings of $4.67 per share in the first quarter of 2017, crushing the Zacks Consensus Estimate of $3.97 on stellar revenue growth. Also, the figure improved 27.2% on a year-over-year basis. Interestingly, over the past four trailing quarters, the company beat estimates at an average of 11.55%.
Revenues increased 13% year over year to $674 million, driven by growth in recurring instrument, accessory and service, and systems revenue. Revenues also beat the Zacks Consensus Estimate of $661 million.
Business Highlights
Intuitive Surgical posted solid numbers in the quarter, courtesy of rising customer adoption of procedures and growth in system placements.
Worldwide da Vinci procedure volumes grew approximately 18% year over year, thanks to stellar performances in the U.S. general surgery and worldwide urologic procedures. Notably, the company shipped 133 da Vinci surgical systems, up from 110 in the first quarter of 2016.
Revenue Details
Instruments and Accessories: Revenues at the segment grew 18.2% to $380.8 million in the quarter, driven by strong procedure growth and increased sales of stapling and vessel sealing products. Revenues realized per procedure were approximately $1,840 compared with $1,830 in the year-ago quarter.
System: Sales increased 3.6% to $153.2 million buoyed by higher revenues from operating lease activities. Intuitive Surgical placed 133 system orders in the quarter, up from 110 in the year-ago quarter. Management at Intuitive Surgical noted that 21 systems were placed under operating lease transactions, compared with 19 systems in the year-ago quarter. At the end of the quarter, there were 95 systems in the field under operating leases.
Service: The Company registered revenues of $140.2 million, up 12.6% on a year-over-year basis on growth in the installed base of da Vinci systems.
International Growth
Per management, the company posted revenues of $183 million outside the U.S., up 12% from the first quarter of 2016.
The company placed 56 system orders, compared with 36 in the year-ago quarter and 63 in the fourth quarter. These included 21 orders in Europe, seven in Korea, six in India, six in Japan and two in China.
Financial Update
Intuitive Surgical ended the first quarter of 2017 with $3.1 billion in cash, cash equivalents, and investments, down by $1.7 billion on a year-over-year basis.
Outlook
Intuitive Surgical plans to launch an upgrade to the company’s flagship Vinci Xi technology – da Vinci X. In this regard, management confirmed the submission of documents for the CE Mark approval for Vinci X. Furthermore, the company expects availability of this device in Europe by the second quarter.
For the second quarter, the company expects procedure growth rate to slow down a bit outside the U.S.
Intuitive Surgical anticipates full-year 2017 procedure growth within 12% to 14%, up from the previously provided range of 9% to 12%.
Full-year 2017 gross profit margin is expected in the upper end of the previously provided range of 69% to 71% of net revenue.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimate flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.
Intuitive Surgical, Inc. Price and Consensus
Intuitive Surgical, Inc. Price and Consensus | Intuitive Surgical, Inc. Quote
VGM Scores
At this time, the stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with a 'D'. Following the exact same course, the stock was allocated also a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, stocks has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our styles scores.
Outlook
The stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.