Back to top

Image: Bigstock

What's in Store for Intuitive Surgical's (ISRG) Q4 Earnings?

Read MoreHide Full Article

Intuitive Surgical, Inc. (ISRG - Free Report) is scheduled to release fourth-quarter 2020 results on Jan 21, after the closing bell.

In the last reported quarter, the Zacks Rank #3 (Hold) company delivered an earnings surprise of 38.5%. Its earnings beat estimates in each of the trailing four quarters, the average surprise being 69.4%.

Q4 Estimates

Currently, the Zacks Consensus Estimate for fourth-quarter revenues is pegged at $1.26 billion, suggesting a decline of 1.7% from the year-ago reported figure. The consensus mark for earnings stands at $3.10 per share, indicating a decrease of 10.9% from the prior-year quarter.

Factors to Note

The Instruments & Accessories segment is likely to have witnessed a strong fourth-quarter. In fact, per the preliminary announcement, fourth-quarter revenues at this segment increased 11% on a year-over-year basis to about $747 million, primarily driven by growth in da Vinci procedure volume and stocking orders related to the company’s launch of Extended Use Instruments.

Per management, on an overall basis, the recovery of da Vinci procedures happened gradually during the third quarter and reached approximately 90% of pre-COVID-19 levels by the end of that quarter. Consequently, this momentum might have continued in the to-be-reported quarter.

Intuitive Surgical, Inc. Price and EPS Surprise

Intuitive Surgical, Inc. Price and EPS Surprise

Intuitive Surgical, Inc. price-eps-surprise | Intuitive Surgical, Inc. Quote

Per the preliminary announcement, fourth-quarter 2020 worldwide da Vinci procedures increased approximately 6% from the year-ago quarter. This result takes into account the sustained disruption due to the COVID-19 pandemic.

However, the flagship, da Vinci surgical system, which has been driving revenues consistently for the segment, might have been impacted by procedural delays and pandemic induced system placement disruption. This, in turn, is likely to get reflected in the to-be-reported quarter’s results.

In fact, per the preliminary announcement, Intuitive Surgical witnessed a decline of 12% in revenues with respect to its Systems segment in the to-be-reported quarter.

Nonetheless, Intuitive Surgical is likely to have witnessed improvement with respect to international revenues in the to-be-reported quarter courtesy of robust procedure growth in Asia.

Going by the product operations in the third quarter, the company’s advanced instruments and endoscopy programs have been delivering solid clinical and financial results. Customer adoption of its stapler product line, vessel sealers and E-100 generator has been encouraging. The company has been witnessing strength in the utilization of these products and their targeted clinical procedures with reorder rates being solid. Despite COVID-19 induced disruptions, uptake of newly launched products, and its latest endoscope, Endoscope Plus have been encouraging.

Additionally, Intuitive Surgical has been making progress on its flexible robotics platform, which strives to address the acute need in diagnosis of lung cancer. The company has also initiated the early launch of SureForm 60-millimeter stapler for use with fourth-generation systems.

The aforementioned developments are likely to have contributed to Intuitive Surgical’s fourth-quarter results.

What Our Quantitative Model Suggests

Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here as you will see.

Earnings ESP: Intuitive Surgical has an Earnings ESP of -0.93%%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: It carries a Zacks Rank #3.

Stocks Worth a Look

Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.

Abbott Laboratories (ABT - Free Report) has an Earnings ESP of +1.39% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Haemonetics Corporation (HAE - Free Report) has an Earnings ESP of +2.58% and a Zacks Rank of 3.

Hill-Rom Holdings, Inc. (HRC - Free Report) has an Earnings ESP of +2.39% and a Zacks Rank of

Zacks Names “Single Best Pick to Double”

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.

Free: See Our Top Stock and 4 Runners Up >>