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Medical Instrument Provider Eyes Breakout Amid Upbeat Earnings Results
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Robotic surgery giant Intuitive Surgical (ISRG - Free Report) topped earnings views after the bell on Tuesday, marking the company’s fourth consecutive quarterly beat. The company is the maker of the popular da Vinci Surgical System, which enables complex surgery using a minimally-invasive approach.
The da Vinci System is powered by robotic technology, which has provided Intuitive Surgical with solid exposure to artificial intelligence for healthcare. The system provides 3D High-Definition vision, enabling surgeons to gain superior clarity of target tissue and anatomy.
Healthy customer demand for its products persisted during the quarter. A growing presence outside of the United States bodes well for Intuitive Surgical moving forward.
Fourth-Quarter Results Exceed Estimates
Intuitive Surgical, currently a Zacks Rank #3 (Hold), reported earnings of $1.60/share for the fourth quarter, a 30% year-over-year jump. The figure translated to an 8.84% positive EPS surprise versus the $1.47/share Zacks Consensus Estimate. The company has delivered a trailing four-quarter average earnings surprise of 5.83%.
Revenues of $1.93 billion were in line with estimates and rose 16.5% versus the year-ago period, boosted by a 22% spike in sales of one-time use instruments and accessories. The company witnessed a 21% increase in the number of procedures, continuing the trend of improving procedure volume.
Looking ahead, the growth trend is expected to remain in place. Estimates for fiscal 2024 are stable, with full-year earnings expected to climb 11.38% to $6.36/share. Revenues of $8.04 billion would mark a 12.81% improvement versus last year.
Image Source: Zacks Investment Research
ISRG Stock Performance
ISRG stock completed a powerful cup-with-handle breakout earlier this month, and today’s pullback presents a viable buying opportunity. The stock has risen more than 40% in the past year, widely outperforming the major indices. Renewed strength in the health care sector is providing a durable backing for this industry leader.
Image Source: StockCharts
Intuitive Surgical is part of the Zacks Medical – Instruments industry group, which currently ranks in the top 48% out of more than 250 Zacks Ranked Industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform the market over the next 3 to 6 months.
Quantitative research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1. It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our stock-picking success.
Bottom Line
A growing adoption of minimally-invasive, robot-assisted surgeries and self-automated, home-based care is helping to drive future innovations. Increased usage of the company’s da Vinci System, improving procedure volumes, and solid recurring revenue are key catalysts.
Backed by a top industry group and impressive history of earnings beats, the future looks bright for this market leader.
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Medical Instrument Provider Eyes Breakout Amid Upbeat Earnings Results
Robotic surgery giant Intuitive Surgical (ISRG - Free Report) topped earnings views after the bell on Tuesday, marking the company’s fourth consecutive quarterly beat. The company is the maker of the popular da Vinci Surgical System, which enables complex surgery using a minimally-invasive approach.
The da Vinci System is powered by robotic technology, which has provided Intuitive Surgical with solid exposure to artificial intelligence for healthcare. The system provides 3D High-Definition vision, enabling surgeons to gain superior clarity of target tissue and anatomy.
Healthy customer demand for its products persisted during the quarter. A growing presence outside of the United States bodes well for Intuitive Surgical moving forward.
Fourth-Quarter Results Exceed Estimates
Intuitive Surgical, currently a Zacks Rank #3 (Hold), reported earnings of $1.60/share for the fourth quarter, a 30% year-over-year jump. The figure translated to an 8.84% positive EPS surprise versus the $1.47/share Zacks Consensus Estimate. The company has delivered a trailing four-quarter average earnings surprise of 5.83%.
Revenues of $1.93 billion were in line with estimates and rose 16.5% versus the year-ago period, boosted by a 22% spike in sales of one-time use instruments and accessories. The company witnessed a 21% increase in the number of procedures, continuing the trend of improving procedure volume.
Looking ahead, the growth trend is expected to remain in place. Estimates for fiscal 2024 are stable, with full-year earnings expected to climb 11.38% to $6.36/share. Revenues of $8.04 billion would mark a 12.81% improvement versus last year.
Image Source: Zacks Investment Research
ISRG Stock Performance
ISRG stock completed a powerful cup-with-handle breakout earlier this month, and today’s pullback presents a viable buying opportunity. The stock has risen more than 40% in the past year, widely outperforming the major indices. Renewed strength in the health care sector is providing a durable backing for this industry leader.
Image Source: StockCharts
Intuitive Surgical is part of the Zacks Medical – Instruments industry group, which currently ranks in the top 48% out of more than 250 Zacks Ranked Industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform the market over the next 3 to 6 months.
Quantitative research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1. It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our stock-picking success.
Bottom Line
A growing adoption of minimally-invasive, robot-assisted surgeries and self-automated, home-based care is helping to drive future innovations. Increased usage of the company’s da Vinci System, improving procedure volumes, and solid recurring revenue are key catalysts.
Backed by a top industry group and impressive history of earnings beats, the future looks bright for this market leader.