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Shares of Intuitive Surgical, Inc. (ISRG - Free Report) scaled a new 52-week high of $355.38 on Jul 14, before closing the session slightly lower at $354.00.
Over the past year, this Zacks Rank #2 (Buy) stock has gained 71.6% compared with the 18.3% rise of the industry and the S&P 500’s 17.8% growth.
Over the past five years, the company registered earnings growth of 7.3% compared with the industry’s 4.2% rise. The company’s long-term expected growth rate of 13% compares with the industry’s growth projection of 15.5%. Intuitive Surgical’s earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, the average surprise being 1.9%.
Image Source: Zacks Investment Research
Intuitive Surgical is witnessing an upward trend in its stock price, prompted by its strength in robotics. The optimism led by a solid first-quarter 2023 performance and its progress on the artificial intelligence (AI) front are expected to contribute further. However, concerns regarding the risk of procedure adoption and stiff competition persist.
Let’s delve deeper.
Key Growth Drivers
Strength in Robotics: We are upbeat about Intuitive Surgical’s robot-based da Vinci surgical system that enables minimally-invasive surgery and reduces the trauma associated with open surgery. The da Vinci System is powered by robotic technology that has provided the company with solid exposure to medical mechatronics, robotics and AI for the healthcare space.
Per the first quarter of 2023 earnings call in April, the installed base of da Vinci systems grew approximately 12% year over year. The utilization of clinical systems in the field, measured by procedures per system, was up 13% from the prior-year quarter.
Progress on the AI Front: We are upbeat about the growing adoption of minimally-invasive robot-assisted surgeries, self-automated home-based care, the use of information technology for quick and improved patient care, and the shift of the payment system to a value-based model. These indicate the high prevalence of AI in the MedTech space.
Per Intuitive Surgical’s management, the rise of medical mechatronics, powerful computing, improved sensing, microfabrication and molecular imaging has enabled new approaches to old problems. AI has been enhancing Intuitive Surgical’s product portfolio with clinical applications, diagnostic support, operational efficiency, electronic health record systems, practice workflows and supply chain management.
Strong Q1 Results: Intuitive Surgical’s solid first-quarter 2023 results buoy our optimism. The company witnessed continued growth in da Vinci procedure volume.
Downsides
Risk of Procedure Adoption: Intuitive Surgical faces the risk of adoption of its procedures. This is because adoption growth takes time, as each procedure needs to gain credibility. Furthermore, the wide use of the company’s products requires the training of surgical teams. Market acceptance could be delayed by the time required to complete such training.
Stiff Competition: Intuitive Surgical used to enjoy a monopoly in the market for robots used in abdominal surgery since the launch of its flagship device, the da Vinci System, in 2000. However, after the regulatory approval of Transenterix's surgical robot for abdominal surgery in 2017, competition for Intuitive Surgical intensified.
Other Key Picks
A few other top-ranked stocks in the broader medical space are Becton, Dickinson and Company (BDX - Free Report) , popularly known as BD, HealthEquity, Inc. (HQY - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
BD has gained 10.7% compared with the industry’s 22.1% rise over the past year.
HealthEquity, flaunting a Zacks Rank #1 at present, has an estimated long-term growth rate of 22%. HQY’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 9.1%.
HealthEquity has gained 6.5% against the industry’s 12.9% decline over the past year.
Boston Scientific, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.5%. BSX’s earnings surpassed estimates in two of the trailing four quarters and missed in the other two, the average surprise being 1.9%.
Boston Scientific has gained 42.7% against the industry’s 19.9% decline over the past year.
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Intuitive Surgical (ISRG) Hits 52-Week High: What's Aiding It?
Shares of Intuitive Surgical, Inc. (ISRG - Free Report) scaled a new 52-week high of $355.38 on Jul 14, before closing the session slightly lower at $354.00.
Over the past year, this Zacks Rank #2 (Buy) stock has gained 71.6% compared with the 18.3% rise of the industry and the S&P 500’s 17.8% growth.
Over the past five years, the company registered earnings growth of 7.3% compared with the industry’s 4.2% rise. The company’s long-term expected growth rate of 13% compares with the industry’s growth projection of 15.5%. Intuitive Surgical’s earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, the average surprise being 1.9%.
Image Source: Zacks Investment Research
Intuitive Surgical is witnessing an upward trend in its stock price, prompted by its strength in robotics. The optimism led by a solid first-quarter 2023 performance and its progress on the artificial intelligence (AI) front are expected to contribute further. However, concerns regarding the risk of procedure adoption and stiff competition persist.
Let’s delve deeper.
Key Growth Drivers
Strength in Robotics: We are upbeat about Intuitive Surgical’s robot-based da Vinci surgical system that enables minimally-invasive surgery and reduces the trauma associated with open surgery. The da Vinci System is powered by robotic technology that has provided the company with solid exposure to medical mechatronics, robotics and AI for the healthcare space.
Per the first quarter of 2023 earnings call in April, the installed base of da Vinci systems grew approximately 12% year over year. The utilization of clinical systems in the field, measured by procedures per system, was up 13% from the prior-year quarter.
Progress on the AI Front: We are upbeat about the growing adoption of minimally-invasive robot-assisted surgeries, self-automated home-based care, the use of information technology for quick and improved patient care, and the shift of the payment system to a value-based model. These indicate the high prevalence of AI in the MedTech space.
Per Intuitive Surgical’s management, the rise of medical mechatronics, powerful computing, improved sensing, microfabrication and molecular imaging has enabled new approaches to old problems. AI has been enhancing Intuitive Surgical’s product portfolio with clinical applications, diagnostic support, operational efficiency, electronic health record systems, practice workflows and supply chain management.
Strong Q1 Results: Intuitive Surgical’s solid first-quarter 2023 results buoy our optimism. The company witnessed continued growth in da Vinci procedure volume.
Downsides
Risk of Procedure Adoption: Intuitive Surgical faces the risk of adoption of its procedures. This is because adoption growth takes time, as each procedure needs to gain credibility. Furthermore, the wide use of the company’s products requires the training of surgical teams. Market acceptance could be delayed by the time required to complete such training.
Stiff Competition: Intuitive Surgical used to enjoy a monopoly in the market for robots used in abdominal surgery since the launch of its flagship device, the da Vinci System, in 2000. However, after the regulatory approval of Transenterix's surgical robot for abdominal surgery in 2017, competition for Intuitive Surgical intensified.
Other Key Picks
A few other top-ranked stocks in the broader medical space are Becton, Dickinson and Company (BDX - Free Report) , popularly known as BD, HealthEquity, Inc. (HQY - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
BD, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 10.1%. BDX’s earnings surpassed estimates in all the trailing four quarters, with an average of 5.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BD has gained 10.7% compared with the industry’s 22.1% rise over the past year.
HealthEquity, flaunting a Zacks Rank #1 at present, has an estimated long-term growth rate of 22%. HQY’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 9.1%.
HealthEquity has gained 6.5% against the industry’s 12.9% decline over the past year.
Boston Scientific, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.5%. BSX’s earnings surpassed estimates in two of the trailing four quarters and missed in the other two, the average surprise being 1.9%.
Boston Scientific has gained 42.7% against the industry’s 19.9% decline over the past year.