Intuitive Surgical, Inc. (ISRG - Free Report) is one of the top-performing stocks in the U.S. MedTech space. The company’s solid revenue base, improving financial performance and unwavering focus on minimally-invasive surgical methods are key catalysts.
The company has a positive average earnings surprise of 19.7% for the trailing four quarters. Moreover, in the last 60 days, the Zacks Consensus Estimate for earnings has improved 4.3% to $2.43. This reflects strong prospects of the company.
In the past year, shares of Intuitive Surgical have rallied 64.1% against the industry’s decline of 2.3%. The current level is also higher than the S&P 500’s gain of 11.6%. If you want to cash in on the share price appreciation, it’s time you add the stock to your portfolio. Intuitive Surgical sports a Zacks Rank #1 (Strong Buy).
What’s Favoring the Stock?
Solid Q1 Results
Intuitive Surgical delivered strong first-quarter 2018 results. The company’s flagship da Vinci procedures saw solid growth and holds tremendous potential. The company also saw expansion outside the United States, which buoys optimism. Both earnings and revenues surpassed the consensus mark.
Revenues totaled $848 million, up 24.7% from the prior-year quarter. Meanwhile, earnings surged 42.7% on a year-over-year basis.
Outside the United States, revenues totaled $275 million, up 49% on a year-over-year basis and 11% sequentially, while OUS procedures rose 18%.
da Vinci Surgical Platform Holds Promise
Intuitive Surgical has of late been focusing on minimally-invasive surgical procedures in order to avoid the trauma associated with open surgery. The da Vinci System is powered by robotic technology that allows the surgeon’s hand movements to be translated into smaller, precise movements.
Notably, in the first quarter of 2018, da Vinci procedures grew approximately 15% on a year-over-year basis. Management replaced 185 da Vinci surgical systems, up from 133 in the year-ago quarter. Furthermore, the company’s installed base grew 13% from a year ago.
Strong Revenue Base
Since 2014, Intuitive Surgical has been delivering strong revenues. Till 2017, revenues saw a CAGR of 15.6% to $3.1 billion.
Moreover, the company has a solid recurring revenue base. In the first quarter of 2018, total recurring revenues were $623 million, representing 73% of total revenues. Total recurring revenues in 2017 was $2.2 billion representing 72% of total revenues.
Other Key Picks
Other top-ranked stocks in the broader medical space are ABIOMED, Inc. (ABMD - Free Report) , Genomic Health, Inc. (GHDX - Free Report) and Exelixis, Inc. (EXEL - Free Report) .
ABIOMED has a long-term growth rate of 27%. The stock sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Genomic Health has an expected growth rate of 187.5% for the current quarter. The stock sports a Zacks Rank #1.
Exelixis has a projected growth rate of 75% for the current quarter. The stock sports a Zacks Rank #1.
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