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Analyst Blog

Headquartered in Morrisville, NC, TransEnterix, Inc (TRXC - Snapshot Report) recently introduced the first radical hysterectomy utilizing Senhance, the world's only haptic surgical robotic system.

Notably, radical hysterectomy is a major surgical treatment procedure done on patients with early stage cervical cancer. TransEnterix has been a pioneer in the use of robotics to improve minimally invasive surgery and has successfully used its high-end techniques in the field of hysterectomy as well. In this regard, a report by Transparency Market Research suggests that 1 out of 3 women in the U.S. undergo hysterectomy every year.

Coming to share price movement, TransEntrix fell 4.6% to close at $1.66, failing to justify the development. A further analysis shows that current market trends lack luster, as the company represents a negative one-year return of 25.9%, way below the S&P 500’s return of 8.6% over the same time frame.

Despite such dismal market sentiments, we are quite optimistic regarding the development as TransEntrix’s high exclusive surgical robot, Senhance provides key benefits like precision of system, camera control, ergonomics and haptics that enhance the efficiency and safety of high-risk oncological dissection operative procedures.

Notably, Senhance surgical robots were known as ALF-X Robotic Surgical System earlier. The company saw the first global sale of an ALF-X system to Humanitas Hospital, a leading teaching and research hospital located in Milan, in the last reported second quarter of 2016.

Our Take

Market trends for TransEntrix are unimpressive with regards to the one-year-return metric. Nevertheless, the estimate trend holds considerable promise as three analysts forecast a loss of 41 cents per share for the current year, which has narrowed down by 6 cents over the last 2 months.

Meanwhile, a report by the Markets And Markets forecasts that the global cervical cancer screening market will reach a worth of $22 billion by 2020, growing at a CAGR of 7.0%. Banking on such encouraging data, we expect TransEnterix to gain considerable traction with the latest development and also make a turnaround in the days to come.

Key Picks

TransEnterix holds a Zacks Rank #2 (Buy).

Other favorably ranked stocks in the broader medical sector are GW Pharmaceuticals Plc. (GWPH - Analyst Report) , ABIOMED Inc (ABMD - Analyst Report) and Quidel Corp. (QDEL - Snapshot Report) . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

GW Pharmaceuticals has a solid year-to-date return of 91.7%, way better than the S&P 500’s 5.2% over the same time frame. Notably, the company posted a positive earnings surprise in the last four quarters, the average being 41.6%.

ABIOMED posted impressive one-year return of 52.1%. The company posted a positive earnings surprise in the last four quarters, the average being 34.9%

Quidel Corp. has a positive year-to-date return of 2%. The stock has a healthy expected earnings growth rate of 20%.

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