ISRG (INTUITIVE SURGICAL
INC)
- P/E: 48
- GAAP DILUTED YEAR-OVER-YEAR EPS GROWTH LAST QUARTER: $1.13
- SECTOR: HEALTH TECHNOLOGY
- ASSETS-LIABILITIES: 7.05
- DIVIDEND: none
ISRG is the ticker for
Intuitive Surgical Inc, a company endeavoring in the manufacture and
distribution of robotic surgical devices. The company recently
gained FDA approval for a lower-cost device. They have a clean
balance sheet with a history of upside surprises against earnings
expectations, and report again 7/20/17.
Revenues increased nearly
14%, while EPS increased 32% compared to the Q1 '16 results. While liabilities decreased on a
year-over-year basis, assets decreased by a larger margin. R&D
spending increased 36%, and administrative costs rose 16%. Taxes
were cut in half, although the revenues increased, due to modified
accounting principles, and tax benefits for the employee share-based
compensation.. The ratio of assets-liabilities decreased from 9.14
to 7.05, which is still a considerable margin. ISRG increased their
share buyback by a multiple of 250 on a year-over-year basis, and
divested investment assets to free cash for employee share
compensation, as well.
Some health professionals
have stated that Intuitive Surgical's Davinci surgery system is not
beneficial, as a surgeon still must control the device's robotic
arms. Davinci is most useful for minimally invasive gynecological and urological
procedures which utilize robotic arms to avoid human error. For
surgeries in which the doctor is capable of performing the operation
reasonably manually, there is no practical application for a $2
million device to replicate the movements via remote control. A
study showed that minimally invasive urological procedures performed
with Davinci led to reduced recovery time, with a similarly
favorable result. Increased demand for the product's use in gynecological procedures,
general surgery, urological operations, and kidney cancer
applications led to a nearly 21% increase in global Davinci unit
shipments.
Gary Guthart has been the
company's CEO since 2010. He has been with the company since 1996,
he holds a BS and PhD, and worked with computer-assisted surgery at
Stanford Research Institute prior to joining ISRG. The Davinci X
surgical system received FDA clearance 5/31/17. Guthart states that
the Davinci X is designed to provide services at a lower price
point. This will provide an opportunity to provide services to
clients who may not benefit enough from the system to justify a $2
million expenditure.
Although there are no
direct competitors which can be utilized for stock valuation comparison, it is important to note that Medtronics, Alphabet Inc,
and Johnson and Johnson all have connections with smaller surgical
robotics companies. ISRG trades at a premium to the average S&P
stock with a P/E of 48, but its growth rate is also above average at
14% revenue and 32% EPS growth. ISRG has beat wall street
expectations in each of the last 8 quarters, propelling expectations
higher with each quarterly report.
https://www.estimize.com/isrg
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