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3 Reasons to Retain Intuitive Surgical (ISRG) in Your Portfolio
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Intuitive Surgical, Inc. (ISRG - Free Report) is well poised for growth in the coming quarters, courtesy of its strength in robotics. The optimism, led by solid first-half 2023 results and its progress on the artificial intelligence (AI) front, is expected to contribute further. Risks pertaining to procedure adoption and stiff competition persist.
Shares of this Zacks Rank #3 (Hold) company have risen 7.8% year to date against the industry’s 3.5% decline. The S&P 500 Index has gained 15.1% during the same time frame.
Intuitive Surgical, the pioneer of robotic-assisted surgery and the renowned provider of minimally invasive care, has a market capitalization of $100.47 billion. It projects 15.7% growth over the next five years and expects to maintain its strong performance going forward.
The company’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed the same in one, delivering an average surprise of 4.19%.
Image Source: Zacks Investment Research
Let’s delve deeper.
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.
On ISRG’s second-quarter 2023 earnings call in July, the company reported that the installed base of the da Vinci system grew approximately 13% year over year. The utilization of clinical systems in the field, measured by procedures per system, was up 9% from the prior-year quarter’s level.
Progress on the AI Front: We are also positive 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 management, the rise of medical mechatronics, powerful computing, improved sensing, microfabrication and molecular imaging has enabled new solutions 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 Q2 Results: The company ended the second quarter on a strong note, wherein both earnings and revenues beat their respective consensus mark. The company witnessed continued growth in its da Vinci procedure volume. Although COVID-19 cases adversely impacted its procedure volume in China during the quarter, the country plans to add 559 robotic systems in the coming years. Intuitive Surgical will provide some of these systems, mostly between 2024 and 2027. This will drive top-line growth significantly.
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 training of surgical teams. Market acceptance could be delayed by the time required to complete such trainings.
Stiff Competition: Since the launch of its flagship device, the da Vinci System, in 2000, Intuitive Surgical used to enjoy a monopoly in the market for robots used in surgery. However, the competition for ISRG intensified following the regulatory approval of Transenterix's surgical robot for abdominal surgery in 2017.Several other companies have introduced products in the field of robotic-assisted medical procedures or are developing products to enter the field.
Estimate Trend
ISRG is witnessing a positive estimate revision trend for 2023. In the past 30 days, the Zacks Consensus Estimate for earnings has moved 1.6% north to $5.56 per share.
The consensus mark for the company’s third-quarter 2023 revenues is pegged at $1.77 billion, indicating a 14.7% improvement from the year-ago quarter’s reported number.
Alcon has an estimated long-term growth rate of 14.9%. Its earnings surpassed estimates in three of the trailing four quarters and met the same once, delivering an average surprise of 8.03%.
ALC’s shares haverallied 20.6% year to date against the industry’s3.5% decline.
SiBone has an estimated long-term growth rate of 22.9%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 20.37%.
SIBN’s shares have risen 57.5% year to date against the industry’s3.5% decline.
Integer Holdings has an estimated long-term growth rate of 12.1%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 8.43%.
ITGR’s shares have risen 22.5% year to date against the industry’s3.5% decline.
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3 Reasons to Retain Intuitive Surgical (ISRG) in Your Portfolio
Intuitive Surgical, Inc. (ISRG - Free Report) is well poised for growth in the coming quarters, courtesy of its strength in robotics. The optimism, led by solid first-half 2023 results and its progress on the artificial intelligence (AI) front, is expected to contribute further. Risks pertaining to procedure adoption and stiff competition persist.
Shares of this Zacks Rank #3 (Hold) company have risen 7.8% year to date against the industry’s 3.5% decline. The S&P 500 Index has gained 15.1% during the same time frame.
Intuitive Surgical, the pioneer of robotic-assisted surgery and the renowned provider of minimally invasive care, has a market capitalization of $100.47 billion. It projects 15.7% growth over the next five years and expects to maintain its strong performance going forward.
The company’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed the same in one, delivering an average surprise of 4.19%.
Image Source: Zacks Investment Research
Let’s delve deeper.
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.
On ISRG’s second-quarter 2023 earnings call in July, the company reported that the installed base of the da Vinci system grew approximately 13% year over year. The utilization of clinical systems in the field, measured by procedures per system, was up 9% from the prior-year quarter’s level.
Progress on the AI Front: We are also positive 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 management, the rise of medical mechatronics, powerful computing, improved sensing, microfabrication and molecular imaging has enabled new solutions 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 Q2 Results: The company ended the second quarter on a strong note, wherein both earnings and revenues beat their respective consensus mark. The company witnessed continued growth in its da Vinci procedure volume. Although COVID-19 cases adversely impacted its procedure volume in China during the quarter, the country plans to add 559 robotic systems in the coming years. Intuitive Surgical will provide some of these systems, mostly between 2024 and 2027. This will drive top-line growth significantly.
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 training of surgical teams. Market acceptance could be delayed by the time required to complete such trainings.
Stiff Competition: Since the launch of its flagship device, the da Vinci System, in 2000, Intuitive Surgical used to enjoy a monopoly in the market for robots used in surgery. However, the competition for ISRG intensified following the regulatory approval of Transenterix's surgical robot for abdominal surgery in 2017.Several other companies have introduced products in the field of robotic-assisted medical procedures or are developing products to enter the field.
Estimate Trend
ISRG is witnessing a positive estimate revision trend for 2023. In the past 30 days, the Zacks Consensus Estimate for earnings has moved 1.6% north to $5.56 per share.
The consensus mark for the company’s third-quarter 2023 revenues is pegged at $1.77 billion, indicating a 14.7% improvement from the year-ago quarter’s reported number.
Intuitive Surgical, Inc. Price
Intuitive Surgical, Inc. price | Intuitive Surgical, Inc. Quote
Stocks to Consider
A few better-ranked stocks from the broader medical space are Alcon (ALC - Free Report) , SiBone (SIBN - Free Report) and Integer Holdings (ITGR - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Alcon has an estimated long-term growth rate of 14.9%. Its earnings surpassed estimates in three of the trailing four quarters and met the same once, delivering an average surprise of 8.03%.
ALC’s shares haverallied 20.6% year to date against the industry’s3.5% decline.
SiBone has an estimated long-term growth rate of 22.9%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 20.37%.
SIBN’s shares have risen 57.5% year to date against the industry’s3.5% decline.
Integer Holdings has an estimated long-term growth rate of 12.1%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 8.43%.
ITGR’s shares have risen 22.5% year to date against the industry’s3.5% decline.