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Anatomy of Success: Intuitive Surgical (ISRG)

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The Zacks Rank is a proven stock-picking system that helps both beginning and experienced investors find strong companies at any given moment. The model, which emphasizes earnings estimates and estimate revisions, discovers companies of all shapes and sizes that are displaying the right characteristics to beat the market.

When a particular company earns the desired Zacks Rank #1 (Strong Buy), it is on track to provide remarkable returns over the next one to three months. Of course, achieving this ideal rank is no easy task. Of the thousands of companies tracked by Zacks, only about 5% earn this designation.

Below, you will read about one specific company that helped prove the strength of the Zacks Rank. If investors had followed our model when it identified this futuristic healthcare technology manufacturer, they would have achieved massive profits.

Intuitive Surgical, Inc. (ISRG - Free Report)

Intuitive Surgical is the global leader in minimally invasive robotic-assisted surgery. The company is best known for its da Vinci Surgical System, which enables surgeons to operate through a few small incisions or the belly button from a nearby ergonomic console. The da Vinci System features a magnified 3D HD vision system and tiny wristed instruments that bend and rotate far greater than the human hand.

Over the past year, the Zacks Rank has spotted ISRG as a strong option multiple times. The stock first earned a Zacks Rank #1 (Strong Buy) on June 9, 2017. However, things really started picking up for the company directly after its next earnings report in July.

Intuitive posted earnings of $1.98 per share, topping the Zacks Consensus Estimate by five cents. The company also witnessed quarterly revenues of $756 million, cruising past our consensus estimate and improving nearly 13% on a year-over-year basis. ISRG would earn its second #1 (Strong Buy) designation just one day after reporting.

Throughout the next few months, the stock would never dip below a Zacks Rank #3 (Hold) and witnessed several stretches where it was a Zacks Rank #2 (Buy). ISRG also briefly saw its third #1 (Strong Buy) ranking on Dec. 15, 2017.

Intuitive earned its next #1 (Strong Buy) designation on April 20, and it maintains that ranking today. This came on the back of another strong quarterly earnings report, which not only surpassed expectations, but also inspired positive revisions to forward-looking estimates.

In its latest quarter, ISRG posted earnings of $2.44 per share, crushing the Zacks Consensus Estimate of $1.99 and improving more than 43% from the year-ago period. Meanwhile, revenue of $848 million was well ahead of our consensus estimate of $767 million.

The below chart demonstrates the price performance for ISRG and 12-month forward looking EPS estimate (in red), starting from the time the stock first earned a Zacks Rank #1 (Strong Buy).

As we can see, ISRG has been a massive winner for those that followed the Zacks Rank. The stock is currently up about 50.3% since earning a Zacks Rank #1 (Strong Buy) last year. Investors should know that our model is the simplest way to identify elite stocks poised to beat the market on a consistent basis.

Want more market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!

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