Intuitive Surgical, Inc. (ISRG): Should You Buy Stock Now?

If you’re looking for a hot stock to buy in the health-care industry, few have garnered the attention that Intuitive Surgical, Inc. (NASDAQ:ISRG) has lately. The medical robotics maker has drawn in both bullish and bearish opinion aplenty as it pushes its surgical robots, although the company’s shares have fallen more than 13% over the past year, and now sit far off its 52-week high. Earnings season is a chance for redemption, however — but did Intuitive Surgical make the cut, and is it worth your investment?

Intuitive Surgical Inc (ISRG)Climbing higher on earnings
Analysts expected big things from the company, projecting double-digit growth in both revenue and earnings per share. Their confidence was justified: Intuitive Surgical, Inc. hasn’t whiffed on earnings in the past year, and the company’s been one of the brightest success stories of recent times with its innovative da Vinci surgical machine.

This quarter, Intuitive Surgical, Inc. (NASDAQ:ISRG) did it again. The company’s revenue jumped to more than $611 million, outstripping analyst expectations by nearly $30 million, and growing a whopping 23.4% year over year. Intuitive’s earnings similarly impressed, with net income soaring to $189 million, for an EPS total of $4.56. That result absolutely shredded projections of $3.99, and represented year-over-year growth of more than 30%.

Revenue from instruments and accessories drove the growth engine this quarter, jumping 26%. The company showed few signs of the supposed dangers of robotic surgery touted by some in the health-care field recently. If the sales are any indication, hospitals are still embracing the new technology’s less-invasive properties that Intuitive Surgical, Inc. (NASDAQ:ISRG) markets as promising faster recovery for patients.

Intuitive’s real victory this quarter came from procedural growth, however. Procedures are perhaps the most important metric for shareholders to watch, as they signal how often hospitals are using the da Vinci and its accessories. While product sales are nice, procedural growth will make or break the robotic surgery industry as doctors and hospitals catch on to the robotics trend. Fortunately, Intuitive posted an 18% growth in procedures this quarter, with general surgeries and gynecological procedures fueling that number. Prostatectomies fell in the U.S., but one procedure isn’t enough to sink Intuitive Surgical, Inc. (NASDAQ:ISRG): The da Vinci is approved for a wide range of surgeries, something that safeguards the company against a decline in any one area.

That 18% is a slight fall from the 20% procedural growth the company recorded in 2012. But it’s nothing to fret about; Intuitive hit this earnings report right on the mark.

Is now the time to buy?
Investors haven’t liked what they’ve seen thus far, as shares of the company have plunged 4% in early after-hours trading after falling 2.8% during the day. However, the market’s pessimism is your opportunity.

Intuitive Surgical, Inc. (NASDAQ:ISRG)’s still growing procedures and product sales despite all the PR negativity that has surrounded the medical robotics industry lately. As the da Vinci gains approvals and usage in more general surgeries, the technology will only become more widespread, with more doctors feeling comfortable using the device. That diversity is key: Fellow medical robotics maker MAKO Surgical Corp. (NASDAQ:MAKO) has struggled with sales growth as it markets its robotics devices for niche orthopedics procedures, and the company has yet to reach profitability. MAKO, with its small size and struggling financials, is much more exposed to the ups and downs of this growing industry.

Not so for Intuitive. This is already a robotics juggernaut, and it’s firmly leading the pack into the next wave of medical device innovation. The market’s sell-off is a great point to pick up a great company on a dip. Intuitive Surgical, Inc. (NASDAQ:ISRG) hasn’t disappointed so far despite its slumping stock, and this earnings season chalked up another victory for this innovative company.

The article Should You Buy Stock in Intuitive Surgical After Its Earnings Hit? originally appeared on Fool.com.

Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends Intuitive Surgical and MAKO Surgical Corp. (NASDAQ:MAKO). The Motley Fool owns shares of Intuitive Surgical.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

The 10 Longest Wars of All Time

The 13 Worst Looking Foods that Taste Great

The 6 Most Gruesome Injuries Suffered During a Sports Match

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!