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Intuitive Surgical (ISRG) Expects Strong Revenues in Q4


Leading provider of robotic-assisted surgery, Intuitive Surgical, Inc. ISRG announced that it expects fourth-quarter 2016 revenues of approximately $757 million, reflecting an increase of approximately 12% from $677 million in the fourth quarter of 2015. The upside will come primarily from da Vinci procedure growth.

Over the past one year, Intuitive Surgical registered a return of almost 21.96%, which is higher than both the Zacks categorized Medical Instruments sub-industry’s return of roughly 8.84% and the S&P 500’s return of 18.65%.

The estimate revision trend also seems quite favorable for the stock at this moment, with one estimate moving up in the last 60 days and no downward movement, indicating chances of a recovery ahead. Notably, the current fiscal year estimate for the stock stands at $18.79 per share. Further, we are optimistic about continued advancements in Intuitive Surgical’s technology platforms, client base and sales pipeline. Also, a long-term expected earnings growth rate of 12.27% and a projected sales growth of 11.85% instill some confidence in its investors.

In 2016, approximately 753,000 surgical procedures were performed with the da Vinci Surgical System. This reflects an increase of approximately 15% from approximately 652,000 procedures performed in 2015. The growth in overall 2016 procedure volume was primarily driven by growth in U.S. general surgery procedures and worldwide urologic procedures. da Vinci procedures increased approximately 15% year over year in the fourth quarter of 2016. The company expects total da Vinci procedures to grow approximately 9% to 12% in 2017.

We believe that the 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 volumes outside the U.S. present significant growth opportunities for the company.

Zacks Rank & Key Picks

Currently, Intuitive Surgical has a Zacks Rank #2 (Buy).

Other favorably ranked stocks in the broader medical sector include Glaukos Corporation GKOS, Dextera Surgical Inc. DXTR and Penumbra Inc. PEN. Notably, Glaukos Corporation and Penumbra sport a Zacks Rank #1 (Strong Buy) while Dextera carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Glaukos has a long-term expected earnings growth rate of approximately 25%. Notably, the stock registered an impressive one-year return of 109.14%.

Dextera Surgical posted a positive earnings surprise of 8.3% in the last reported quarter. Additionally, a long-term expected earnings growth rate of 25% raises investor confidence.

Penumbra has a long-term expected earnings growth rate of 20%. Notably, the stock registered a stellar one-year return of almost 32.9%.

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