Share price of Intuitive Surgical Inc. (ISRG - Analyst Report) rallied to a 52-week high of $720.94 on Sep 27, eventually closing a tad lower at $720.19. This represents a strong year-to-date return of about 31.86%, much better than the S&P 500’s return of 5.67% over the same time frame.
Currently, Intuitive Surgical carries a Zacks Rank #3 (Hold). The stock has a market cap of 27.22 billion and a long-term expected earnings growth rate of 11.26%.
We believe that growing adoption of Intuitive Surgical’s da Vinci system among physicians for general surgery, oncology, urology and gynecology procedures is a key growth catalyst. Moreover, increasing procedural volume outside the U.S. presents a significant growth opportunity for the company. Further, the integrated Table Motion product line has gained traction within a short span of time. This will likely boost top-line growth.
Meanwhile, increased spending on product development and higher investment in expanding the company’s footprint in international markets (particularly in Europe) are prudent moves to drive long-term growth.
Intuitive Surgical had impressed in the second quarter of 2016 with exceptional global procedure growth, solid capital placement, strong product margin and new product launches. Notably, the company reported adjusted earnings of $4.86 per share, which beat the Zacks Consensus Estimate by 65 cents.
Key Sector Picks
Better-ranked stocks in the medical sector include GW Pharmaceuticals plc (GWPH - Analyst Report) , Lantheus Holdings, Inc. (LNTH - Snapshot Report) and Quidel Corp. (QDEL - Snapshot Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Biopharmaceutical major, GW Pharmaceuticals consistently surpassed expectations in the last four quarters, with an average positive surprise of 41.7%. This represents an impressive year-to-date return of approximately 58.1%.
Lantheus Holdings, a worldwide provider of diagnostic medical imaging agents, has an impressive long-term earnings growth rate of 12.5%. Year to date, the stock has performed better than the S&P 500, with a gain of 143.2%.
Quidel, a provider of diagnostic testing solutions for applications primarily in infectious diseases, women’s health, and gastrointestinal diseases, has an impressive long-term earnings growth rate of 20%, better than the industry’s 14.8%. The stock recorded a gain of 4.3% year to date.
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